[Federal Register Volume 68, Number 117 (Wednesday, June 18, 2003)]
[Rules and Regulations]
[Pages 36676-36712]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-15065]



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Part III





Department of Health and Human Services





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Food and Drug Administration



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21 CFR Part 314



Applications for FDA Approval To Market a New Drug: Patent Submission 
and Listing Requirements and Application of 30-Month Stays on Approval 
of Abbreviated New Drug Applications Certifying That a Patent Claiming 
a Drug Is Invalid or Will Not Be Infringed; Final Rule

  Federal Register / Vol. 68, No. 117 / Wednesday, June 18, 2003 / 
Rules and Regulations  

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 314

[Docket No. 02N-0417 ]
RIN 0910-AC48


Applications for FDA Approval to Market a New Drug: Patent 
Submission and Listing Requirements and Application of 30-Month Stays 
on Approval of Abbreviated New Drug Applications Certifying That a 
Patent Claiming a Drug Is Invalid or Will Not Be Infringed

AGENCY: Food and Drug Administration, HHS.

ACTION: Final rule.

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SUMMARY: The Food and Drug Administration (FDA) is amending its patent 
submission and listing requirements for new drug applications (NDAs). 
The final rule clarifies the types of patents that must and must not be 
submitted and revises the declaration that NDA applicants must provide 
regarding their patents to help ensure that NDA applicants submit only 
appropriate patents. The final rule also revises the regulations 
regarding the effective date of approval for certain abbreviated new 
drug applications (ANDAs) and certain other new drug applications, 
known as 505(b)(2) applications, submitted under the Federal Food, 
Drug, and Cosmetic Act (the act). In certain situations, Federal law 
bars FDA from making the approval of certain ANDA and 505(b)(2) 
applications effective for 30 months if the applicant has certified 
that the patent claiming a drug is invalid or will not be infringed, 
and the patent owner or NDA holder then brings suit for patent 
infringement. The final rule also states that there is only one 
opportunity for a 30-month stay in the approval date of each ANDA and 
505(b)(2) application. The final rule will make the patent submission 
and listing process more efficient as well as enhance the ANDA and 
505(b)(2) application approval processes.

DATES: Effective Date: This final rule is effective on August 18, 2003.
    Compliance Date: The compliance date is December 18, 2003, for the 
submission of information on polymorph patents.

FOR FURTHER INFORMATION CONTACT: Jarilyn Dupont, Office of Policy and 
Planning (HF-11), Food and Drug Administration, 5600 Fishers Lane, 
Rockville, MD 20857, 301-827-3360.

SUPPLEMENTARY INFORMATION:

I. Introduction

    This final rule revises implementing regulations in part 314 (21 
CFR part 314) for certain statutory amendments to the act, 21 U.S.C. 
301 et seq., relating to new drug applications and generic drug 
approvals. The statutory provisions were added to the act through the 
Drug Price Competition and Patent Term Restoration Act of 1984 (Public 
Law 98-417 (21 U.S.C. 355, 360cc; 35 U.S.C. 156, 271, 282) (``Hatch-
Waxman Amendments'')). These statutory provisions reflect an attempt to 
balance two competing interests: Promoting competition between ``brand-
name'' or ``innovator drugs'' and ``generic'' drugs, and encouraging 
research and innovation. The act promotes competition by creating a 
process to expedite the filing and approval of ANDA and 505(b)(2) drug 
applications (applications submitted under the provisions of section 
505(b)(2) of the act) and for resolving challenges to patents in court 
before marketing begins. At the same time, the act encourages research 
and innovation by protecting the patent interests of the patent owner 
and innovator drug company.
    The final rule maintains a balance between the innovator companies' 
intellectual property rights and the desire to get generic drugs on the 
market in a timely fashion. The final rule limits to one per ANDA or 
505(b)(2) application the maximum number of statutory 30-month stays of 
approval to which an innovator will be entitled when it submits 
multiple patents for the same NDA. Eliminating multiple 30-month stays 
will speed up the approval and market entry of generic drugs. The final 
rule also clarifies patent submission and listing requirements, which 
will reduce confusion and help curb attempts to take advantage of this 
process. Specifically, patents claiming packaging, intermediates, or 
metabolites must not be submitted for listing. Patents claiming a 
different polymorphic form of the active ingredient described in the 
NDA must be submitted if the NDA holder has test data demonstrating 
that a drug product containing the polymorph will perform the same as 
the drug product described in the NDA.

A. What Are the Statutory Provisions Which Affect Patent Submissions 
and the Approval of New Drugs?

    To explain why we (FDA) issued the proposal, we first describe how 
Federal law requires NDA applicants to file patent information and how 
that patent information can affect the approval of ANDA and 505(b)(2) 
applications. (We will refer to these as ``ANDA and 505(b)(2) 
applicants'' or ``ANDA or 505(b)(2) applicants'' and refer to their 
applications as ``ANDA and 505(b)(2) applications'' or ``ANDA or 
505(b)(2) applications'' throughout the remainder of the preamble of 
this document.)
    Section 505(b)(1) of the act (21 U.S.C. 355(b)(1)) requires all NDA 
applicants to file, as part of the NDA, ``the patent number and the 
expiration date of any patent which claims the drug for which the 
applicant submitted the application or which claims a method of using 
such drug and with respect to which a claim of patent infringement 
could reasonably be asserted if a person not licensed by the owner 
engaged in the manufacture, use, or sale of the drug.'' Section 
505(c)(2) of the act (21 U.S.C. 355(c)(2)) imposes a similar patent 
submission obligation on holders of approved NDAs when the NDA holder 
could not have submitted the patent information with its application.
    Under section 505(b)(1) of the act, we publish patent information 
after approval of an NDA application in our approved drug products list 
entitled ``Approved Drug Products With Therapeutic Equivalence 
Evaluations.'' This list is known popularly as the ``Orange Book'' 
because of its orange-colored cover. If patent information is submitted 
after NDA approval, section 505(c)(2) of the act directs us to publish 
the information upon its submission.
    The act also requires ANDA or 505(b)(2) applicants to make 
certifications regarding each of the listed patents pertaining to the 
drug they intend to reference (see sections 505(b)(2)(A)(i) through 
(b)(2)(A)(iv) and 505(j)(2)(A)(vii)(I) through (j)(2)(A)(vii)(IV) of 
the act (21 U.S.C. 355(b)(2)(A)(i) through (b)(2)(A)(iv) and 21 U.S.C. 
355(j)(2)(A)(vii)(I) through (j)(2)(A)(vii)(IV)). In brief, these 
certifications state that:
    [sbull] Patent information has not been filed,
    [sbull] The patent has expired,
    [sbull] The patent will expire on a specific date, or
    [sbull] The patent is invalid or will not be infringed.
    If the ANDA or 505(b)(2) applicant certifies that the patent is 
invalid or will not be infringed (a certification known as a 
``paragraph IV'' certification because it is the fourth type of patent 
certification described in the act\1\), the act requires the applicant 
to notify the

[[Page 36677]]

NDA holder and patent owner (see sections 505(b)(3) and 505(j)(2)(B) of 
the act (21 U.S.C. 355(b)(3) and 355(j)(2)(B)). The notice states that 
an ANDA or 505(b)(2) application containing a paragraph IV 
certification to a listed patent has been submitted for the NDA 
holder's approved drug product (known as the ``listed drug''). The 
notice also includes a ``detailed statement of the factual and legal 
basis of the applicant's opinion that the patent is not valid or will 
not be infringed'' (id.). If the NDA holder or patent owner brings an 
action for patent infringement within 45 days after notice of the 
paragraph IV certification has been received, then we may not make the 
approval of an ANDA or 505(b)(2) application effective for 30 months, 
or such shorter or longer period as a court may order, or until the 
date of a court decision (see sections 505(c)(3)(C) and 
505(j)(5)(B)(iii) of the act (21 U.S.C. 355(c)(3)(C) and 
355(j)(5)(B)(iii)). (We will refer to the date the approval of an ANDA 
or 505(b)(2) application is made effective as the ``approval date'' 
throughout the remainder of this preamble.)
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    \1\ Paragraph IV throughout also refers to paragraph iv, the 
comparable provision in section 505(b)(2)(A) of the act.
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B. What Did the Proposed Rule Say?

    In the Federal Register of October 24, 2002 (67 FR 65448), we 
published a proposed rule (proposed rule) that would address:
    [sbull] The types of patents that must and must not be submitted by 
NDA applicants and NDA holders or patent owners (for purposes of this 
preamble, an NDA applicant is someone who is seeking FDA approval of a 
specific new drug application or supplement, whereas an NDA holder is 
someone whose NDA we have approved);
    [sbull] The types of patents that we will list in the Orange Book;
    [sbull] The patent declaration that NDA applicants must submit as 
part of an NDA, an amendment, a supplement, or when submitting 
information on a newly issued patent; and
    [sbull] The 30-month stay of the effective date of approval for an 
ANDA or 505(b)(2) application.
    The preamble to the proposed rule noted that, on occasion, we have 
seen NDA holders submit new patents for listing shortly before other 
listed patents for the same drug were to expire (see 67 FR 65448 at 
65449). We explained that, in some disputes over recently listed 
patents, the parties had questioned whether particular patents met the 
regulatory requirements for submission and listing in the Orange Book. 
These disputes sometimes resulted in judicial decisions that are 
inconsistent with our regulatory policies or our interpretation of our 
own regulations (id.). We proposed to clarify our regulatory policies 
regarding patent submission, listing, certification, and notice. We 
also issued the proposal to respond, in part, to concerns raised by the 
Bureau of Competition and the Policy Planning Staff of the Federal 
Trade Commission (FTC). On May 16, 2001, the FTC submitted a citizen 
petition to FDA (FDA docket number 01P-0248) (``FTC Citizen Petition'') 
asking for guidance concerning the criteria that a patent must meet 
before it is listed in the Orange Book. The FTC Citizen Petition asked 
us to clarify several patent listing issues and indicated that the FTC 
was conducting an extensive study of generic drug competition.
    In July 2002, the FTC published the results of the study in a 
report entitled ``Generic Drug Entry Prior to Patent Expiration: An FTC 
Study'' (``FTC Report''). The FTC Report focused on the procedures used 
to facilitate a generic drug's entry into the market before the 
expiration of a patent or patents that claim the brand-name drug 
product. The FTC also recommended changing Federal law to ``permit only 
one automatic 30-month stay per drug product per ANDA to resolve 
infringement disputes over patents listed in the Orange Book prior to 
the filing date of the generic applicant's ANDA'' (see FTC Report at 
page ii). The FTC Report explained ``To permit only one 30-month stay 
per drug product per ANDA should eliminate most of the potential for 
improper Orange Book listings to generate unwarranted 30-month stays'' 
(id. at page v (footnote omitted)). In an appendix to its report, the 
FTC asked us to issue a regulation or guidance clarifying whether an 
NDA holder could submit various types of patents for listing in the 
Orange Book. The types of patents for which the FTC sought 
clarification were patents that claimed metabolites, polymorphs, 
intermediates, product-by-process patents, and double patents (see FTC 
Report at pages A-39-A-45).

C. What Does This Final Rule Do?

    The comments received expressed both support for, and opposition 
to, various provisions of the proposed rule. After careful review of 
these comments, we are making final most of the provisions of the 
proposed rule with certain modifications. The final rule:
    [sbull] Allows a full opportunity for only one 30-month stay per 
ANDA or 505(b)(2) application;
    [sbull] Prohibits the submission of patents claiming packaging, 
intermediates, or metabolites;
    [sbull] Requires the submission of certain patents claiming a 
different polymorphic form of the active ingredient described in the 
NDA;
    [sbull] Adds a requirement that for submission of polymorph patents 
the NDA holder must have test data demonstrating that a drug product 
containing the polymorph will perform the same as the drug product 
described in the NDA;
    [sbull] Makes changes to the patent information required to be 
submitted and provides declaration forms for submitting that 
information to FDA, both with the NDA and after NDA approval; and
    [sbull] Does not require claim-by-claim listing on the declaration 
form except for method-of-use patents claiming approved methods of use.

II. Comments on the Proposed Rule

    We received over 35 comments on the proposed rule. The comments 
represented a diverse range of interests such as: Health insurance 
programs, brand name pharmaceutical companies, generic pharmaceutical 
companies, law firms, consumer organizations, pharmacy associations, 
the FTC, the New York Department of Health, large corporations, and 
individuals. In general, most comments supported the rule, either in 
whole or in part, and believed that the rule would help reduce 
prescription drug costs by making generic drugs available more quickly. 
However, other comments opposed the rule because they felt we had 
misinterpreted the act or because they felt that new legislation, 
rather than a regulation, was necessary. We describe the comments, and 
our responses to the comments, in this section. To make it easier to 
identify the comments and our responses, the word ``Comment'' in 
parentheses, will appear before the description of the comment, and the 
word ``Response'' in parentheses, will appear before our response. We 
also have numbered each comment to make it easier to identify a 
particular comment. The number assigned to each comment is only for 
organizational purposes. It does not signify the comment's value, 
importance, or the order in which we received it.

A. Comments on Specific Aspects of the Proposed Rule

1. What Patents Must and Must Not Be Submitted? (Section 314.53(b))
    Proposed Sec.  314.53(b) would require NDA applicants and holders 
or patent owners to submit information on the following types of 
patents for listing in the Orange Book. In brief, the proposed

[[Page 36678]]

rule would clarify that we would list only patents that claim:
    [sbull] The drug substance (ingredient);
    [sbull] The drug product (formulation and composition); and
    [sbull] Method of use.
    Proposed Sec.  314.53(b) would not allow listing of process patents 
and patents claiming packaging, metabolites, or intermediates.
    a. Patents Claiming a Drug Substance--Must Patents that Claim the 
``Same'' Active Ingredient Be Submitted and Listed? For patents that 
claim a drug substance, the proposal stated that an applicant ``shall 
submit information only on those patents that claim the form of the 
drug substance that is the subject of the pending or approved 
application or that claim a drug substance that is the same as the 
active ingredient that is the subject of the approved or pending 
application.'' We explained that an NDA applicant or holder would 
determine whether the drug substance was the ``same'' as the active 
ingredient in the NDA by considering ``whether the drug substances can 
be expected to perform the same with respect to such characteristics as 
dissolution, solubility, and bioavailability'' (see 67 FR 65448 at 
65452).
    Drug substances that are the same active ingredient, but that are 
in different physical forms, are often called ``polymorphs.'' For 
example, the different crystalline forms of a drug substance are 
sometimes known collectively as polymorphs, and drug substances with 
different waters of hydration are sometimes referred to as 
``polymorphs'' as well. (For purposes of this final rule, polymorphs 
include chemicals with different crystalline structures, different 
waters of hydration, solvates, and amorphous forms.) Under the proposed 
rule, an NDA applicant or holder would be required to submit a patent 
claiming a different polymorph from that of the drug substance 
described in the NDA if a drug product containing the polymorph will 
perform the same as the drug product described in the NDA with respect 
to dissolution, solubility, and bioavailability.
    The proposed rule would make the patent listing standards generally 
consistent with the ANDA approval standards. For ANDA approval 
purposes, the active ingredient in a generic drug product can be the 
``same'' as that in the reference listed drug notwithstanding 
differences in the physical forms of their active ingredient if the 
drug product performs the same. Thus, we stated that it would be 
consistent to interpret ``drug substance'' for patent submission and 
listing purposes as including certain drug substances having different 
physical forms if they would be considered the same active ingredient 
for ANDA approval purposes (id.).
    We invited comment on whether we should revise the codified 
language to require an NDA holder to submit additional information 
regarding the basis for its assertion that the drug substances are the 
``same'' active ingredient. We also invited comment on the potential 
impact of the change (allowing the submission of patents claiming 
different polymorphs) on the submission of ANDA and 505(b)(2) 
applications.
    (Comment 1) Several comments disagreed with our proposal to allow 
listing of patents claiming different polymorphs of the active 
ingredient in the listed drug. Some comments stated that section 
505(b)(1) of the act requires the patent to claim the drug substance 
that is the subject of the NDA. Several comments asserted that a patent 
claiming a polymorph that was not the subject of an NDA did not satisfy 
section 505(b)(1) of the act. Other comments argued that ``sameness'' 
for ANDA approval purposes differed from ``sameness'' in patent law, so 
we did not have to develop an identical interpretation of the two 
concepts. Several comments maintained that no such patents could exist 
if the active ingredients were truly the ``same'' because a subsequent 
patent for the ``same'' active ingredient should not have been issued. 
Some comments agreed that patents claiming different polymorphs of the 
same active ingredient should be listed, but only with submission of 
additional information such as clinical trial data required for FDA 
approval or proof that ``sameness'' is beneficial. A few comments 
maintained that the proposal did not change our pre-existing position 
because we have permitted NDA holders and applicants to submit patents 
claiming different polymorphs of the active ingredient. In response to 
our request for comment on the impact on ANDA and 505(b)(2) 
applications, one comment expressed the belief that listing patents 
claiming different polymorphs of the active ingredient would reduce the 
ability of generic manufacturers to ``design around'' the existing 
patents, an option which was contemplated by the Hatch-Waxman 
Amendments.
    (Response) We decline to modify our position taken in the proposed 
rule which would require patents to be submitted for listing that claim 
different polymorphs of the active ingredient described in the NDA. If 
the NDA applicant or holder is able to establish that a polymorph 
claimed in a patent is the ``same'' active ingredient (i.e., that a 
drug product containing the polymorph will perform the same as the drug 
product described in the NDA with respect to such characteristics as 
dissolution, solubility, and bioavailability), the NDA applicant or 
holder must submit the patent to us for listing. We acknowledge that 
there may be some legitimate confusion regarding our prior position 
concerning submission of such patents for listing, which resulted in 
the listing of some polymorph patents in the Orange Book. The 
uncertainty over our policy resulted from certain court decisions, our 
response to those court decisions, and other public statements. The FTC 
Citizen Petition highlighted the need for clarification and is one 
reason we decided to implement this final rule and clarify our 
position. For the reasons explained in the preamble to the proposed 
rule (see 67 FR 65448 at 65452 to 65453), it is appropriate to have a 
consistent interpretation of the ``sameness'' principle in the patent 
listing and ANDA approval contexts. Accordingly, we will not treat 
polymorphs differently for patent submission and listings and ANDA 
approval. The argument that certain polymorph patents should never have 
been issued is not a matter for us to address. The Patent and Trademark 
Office (PTO) is responsible for reviewing and issuing patents. We will 
not question whether the PTO should have issued a particular patent, 
nor will we conduct a ``patent law'' or other analysis to determine 
``sameness.''
    We agree with the comments that suggested we needed to take 
additional steps to help ensure that the submitted patents claim the 
``same'' active ingredient as that described in the NDA. A polymorph 
patent must claim the drug substance (active ingredient) to meet the 
statutory requirements for submission. We have modified the declaration 
requirement and created forms to help ensure that the NDA applicant or 
holder or patent owner confirms that the patent does claim the ``same'' 
active ingredient. The final rule and the declaration forms require 
that the NDA applicant or holder or patent owner certify that test data 
exist demonstrating that a drug product containing the polymorph will 
perform the same as the drug product described in the NDA. If a patent 
claims more than one polymorph, each polymorph for which the required 
test data are available must be identified by claim or description in 
the declaration forms.

[[Page 36679]]

 The final rule does not require these tests to be submitted to FDA at 
the time of patent submission, nor does it require the NDA applicant or 
holder to conduct the tests itself. The testing requirements, however, 
will ensure that only relevant polymorphs are submitted for listing.
    Whether two different polymorphs are the ``same'' active ingredient 
for purposes of drug approval is a scientific determination based upon 
the specific characteristics of the forms of the drug substance 
involved. Only with testing can the scientific determination be made 
that the drug product containing the polymorph will perform the same as 
the drug product described in the NDA. The test data that the NDA 
applicant or holder or patent owner must certify exist at the time of 
patent submission are similar to the type of information required under 
Sec. Sec.  314.50 and 314.94. The following explains more fully the 
required tests or data that would support the statement in the 
declaration forms:
    [sbull] A full description of the polymorphic form of the drug 
substance, including its physical and chemical characteristics and 
stability; the method of synthesis (or isolation) and purification of 
the drug substance; the process controls used during manufacture and 
packaging; and such specifications and analytical methods as are 
necessary to assure the identity, strength, quality, and purity of the 
polymorphic form of the drug substance;
    [sbull] The executed batch record for a drug product containing the 
polymorphic form of the drug substance and documentation that the batch 
was manufactured under current good manufacturing practice 
requirements;
    [sbull] Demonstration of bioequivalence between the executed batch 
of the drug product that contains the polymorphic form of the drug 
substance and the drug product as described in the NDA;
    [sbull] A list of all components used in the manufacture of the 
drug product containing the polymorphic form and a statement of the 
composition of the drug product; a statement of the specifications and 
analytical methods for each component; a description of the 
manufacturing and packaging procedures and in-process controls for the 
drug product; such specifications and analytical methods as are 
necessary to assure the identity, strength, quality, purity, and 
bioavailability of the drug product, including release and stability 
data complying with the approved product specifications to demonstrate 
pharmaceutical equivalence and comparable product stability; and
    [sbull] Comparative in vitro dissolution testing on 12 dosage units 
each of the executed test batch and the NDA product.
This test data requirement corresponds to the test data required of 
ANDA applicants to demonstrate the drug product containing the 
polymorph described in the ANDA will perform the same as the drug 
product described in the NDA. In addition to the data requirements 
described in our regulations cited above (Sec. Sec.  314.50 and 
314.94), we have published guidance documents describing the test data 
ANDA applicants may use to demonstrate that the drug product will 
perform the same as the drug product described in the NDA. (See 
``Guidance for Industry: Changes to an Approved NDA or ANDA'' (November 
1999) and ``Guidance for Industry: Immediate Release Solid Oral Dosage 
Forms CMS 5'' (November 1995); these guidances are available at 
www.fda.gov/opacom/morechoices/industry/guidedc.htm.)
    The stringency of these requirements regarding ``sameness'' also 
should address the concerns that the submission of polymorph patents 
might lead to submission of other patents claiming components which are 
not, but might be, included in a drug described in an NDA. Given the 
narrow legal and scientific basis for submission of polymorph patents, 
the final rule does not open the door to submission of any patents 
claiming formulations or inactive ingredients not contained in the drug 
product described in the NDA.
    We believe that these changes will help deter submission of 
inappropriate polymorph patents. The assumption that a product 
containing a polymorph will perform the same as the product containing 
a different polymorph and described in the NDA will have to be 
substantiated.
    b. Product-by-Process Patents--Should These Patents Be Listed? 
Proposed Sec.  314.53(b) would allow an NDA applicant or holder or 
patent owner to submit information on product-by-process patents. The 
act requires that NDA holders submit patents that claim the drug 
product. However, NDA applicants or holders must not submit patents 
that claim a process for making that product.
    We explained that a product-by-process patent claims a product by 
describing or listing process steps to wholly or partially define the 
claimed product. In a product-by-process patent, the patented, novel 
invention is the product and not the process that is used to make the 
product. We recognized that the distinction between a product-by-
process patent and a process patent might not be readily apparent to 
persons who are unfamiliar with patent law. We sought comment on ways 
to ensure that only appropriate product-by-process patents are listed 
in the Orange Book.
    (Comment 2) Several comments argued that product-by-process patents 
must not be listed. Some comments stated that product-by-process 
patents ``closely resemble'' process patents and that the act does not 
allow listing of process patents. One comment asserted that listing 
product-by-process patents would have a ``profound negative effect'' on 
generic drug approvals because NDA applicants and holders or patent 
owners would attempt to list any product-by-process patent, whether or 
not the process defined in the patent was actually used to manufacture 
the drug product approved in the NDA.
    Similarly, other comments sought to limit the type of product-by-
process patents that could be listed. Several comments would revise the 
rule to require the product-by-process patent to claim a ``novel'' 
product, so that if the drug product described by the product-by-
process patent was a ``known'' drug product or the product already had 
been listed in the Orange Book, we would not list the product-by-
process patent. In other words, the comments sought to ensure that the 
product-by-process patent covered a product that was ``new and 
patentably distinct'' from previously-approved drug products. One 
comment suggested adding a new paragraph to the patent declaration to 
read as follows:
    F. For each drug substance or drug product claim that was (1) 
identified as listable in subparts B and C and (2) is drafted in 
product-by-process format, please provide the following information:
    1. Is the product of the recited process novel? [If the answer 
to question F.1 is ``no,'' stop. The patent cannot be listed. If 
yes, please identify the claim(s) by number.]
    Another comment thought that few drugs would be the subject of a 
product-by-process patent. The comment recommended that we investigate 
any product-by-process patents that were listed in the Orange Book to 
see if these related to the NDA drug product. Yet another comment would 
amend the patent declaration to identify the product-by-process claims 
in the patent, the effective filing date of the patent application, 
whether the product has been previously sold, and, if the product had 
been previously sold, whether such sales occurred more than 1 year 
before the effective filing date of the patent application. The comment 
explained that if the drug's active ingredient has been previously sold 
for more than 1 year before the effective filing date of the product-
by-process patent

[[Page 36680]]

application, the patent would be ineligible for listing because the 
patent would violate a specific provision in patent law.
    In contrast, three comments supported listing product-by-process 
patents. These comments agreed that product-by-process patents are a 
form of a product patent. Two comments stated that we did not need to 
revise the rule to distinguish between product-by-process patents 
(which must be listed) and process patents (which must not be listed). 
The comment suggested revising Sec.  314.53(b) to replace its mention 
of product-by-process patents with ``patents that claim the drug 
substance or drug product at least in part in terms of its method of 
manufacture (product-by-process patents).''
    (Response) We agree that, to be submitted for listing, the product-
by-process patent must claim the drug product that is the subject of 
the NDA. We explained in the proposed rule why a product-by-process 
patent is a type of product patent (see 67 FR 65448 at 65452). We also 
agree that the declaration should be clear enough to ensure that the 
patents that are submitted for listing are product-by-process patents 
and not process patents. In the response to comment 12 in section II.A 
of this document we detail the changes we have made to the declaration 
(including declaration forms) to help ensure that the patents submitted 
for listing are patents that claim the drug product that is the subject 
of the NDA and do not claim the process that is used to manufacture the 
drug product.
    The declaration forms include a question which requires the NDA 
applicant or holder or patent owner to certify whether the patent being 
submitted is a product-by-process patent in which the product claimed 
is novel. Although we do not adopt the wording suggested by several 
comments, we agree that a requirement to identify the product as novel 
will help ensure that the patent is a product-by-process patent. We 
acknowledge that when the PTO issues a patent, the PTO necessarily 
determines that some aspect of the patent claims is ``novel.'' We want 
to make sure that the NDA applicant or holder or patent owner is 
identifying the product claim as the novel aspect. This clarification 
should eliminate the submission of patents that may be mistakenly 
identified as product-by-process patents but, in reality, are process 
patents which cannot be submitted for listing.
    We expect that product-by-process patents will not be submitted 
often. Drug products approved under section 505 of the act typically 
are capable of being described by their chemical formula. Most such 
drug products approved are not of the type that can be described only 
in terms of the process used to produce the product. We decline to add 
any additional questions to the declaration relating to the patented 
product's length of time in the commercial market or other related 
questions, as we believe that the declaration questions we have added 
will accomplish the clarification necessary to prevent the submission 
of process patents.
    c. Patents Claiming Packaging--Do We Consider Containers and 
Delivery Systems to be ``Packaging?'' Proposed Sec.  314.53(b) would 
not have allowed an applicant to list a patent that claimed packaging.
    (Comment 3) Most comments agreed that patents claiming packaging 
should not be submitted for listing. However, some comments stated that 
patents claiming devices or containers that are ``integral'' to the 
drug product or require prior FDA approval should be submitted and 
listed. These comments distinguished between packaging and devices such 
as metered dose inhalers and transdermal patches, which are drug 
delivery systems used and approved in combination with a drug.
    (Response) We agree that patents claiming a package or container 
must not be submitted. Such packaging and containers are distinct from 
the drug product and thus fall outside of the requirements for patent 
submission. However, we have clarified the rule to ensure that if the 
patent claims the drug product as defined in Sec.  314.3, the patent 
must be submitted for listing.
    Section 314.3 defines a ``drug product'' as ``* * * a finished 
dosage form, for example, tablet, capsule, or solution, that contains a 
drug substance, generally, but not necessarily, in association with one 
or more other ingredients.'' The appendix in the Orange Book lists 
current dosage forms for approved drug products. The list includes 
metered aerosols, capsules, metered sprays, gels, and pre-filled drug 
delivery systems. The key factor is whether the patent being submitted 
claims the finished dosage form of the approved drug product. Patents 
must not be submitted for bottles or containers and other packaging, as 
these are not ``dosage forms.'' The revised declaration requirements, 
described in the response to comment 12 in section II.A of this 
document, detail the information required for submission.
    d. Patents Claiming Metabolites--Are Any Patents Claiming 
Metabolites Eligible for Submission and Listing? The proposed rule 
would prohibit submission and listing of a patent claiming a metabolite 
of the approved drug. A metabolite is the chemical compound that 
results after the active ingredient of the drug has broken down inside 
the body. We explained that a patent claiming a metabolite does not 
claim the approved drug, as required by the act, because the metabolite 
exists only after the approved drug has been broken down inside the 
body (see 67 FR at 65451).
    (Comment 4) Most comments agreed with our exclusion of patents 
claiming a metabolite. One comment, however, asked whether we would 
list ``a patent that claims a method of using an approved drug to 
administer a metabolite.'' The comment distinguished a method-of-use 
patent from a patent that claimed the metabolite.
    (Response) The final rule prohibits submission of patents claiming 
metabolites when the metabolite is not the active ingredient described 
in the NDA. The submission of a metabolite patent does not meet the 
legal requirements for patent submissions as discussed in the proposed 
rule (see 67 FR 65448 at 65451). By contrast, if a patent submitted for 
listing claimed an approved method of using an approved drug to 
administer a metabolite, the submission of the patent would be 
permissible as long as all the conditions for submitting ``method-of-
use'' patents are met. We describe the requirements for submission of 
method-of-use patents in the response to comment 7 in section II.A of 
this document. Briefly, if a method of use is described in the labeling 
for the drug product, and there is a patent claiming that method of 
use, the patent must be submitted for listing in the Orange Book, the 
method-of-use claim must be identified in the declaration forms, and 
the labeling language related to the method-of-use claim must be 
provided in the declaration forms.
    e. Patents Claiming Intermediates--Must We Allow Them to Be 
Submitted? The proposed rule would not allow the submission of patents 
that claimed an intermediate. We explained that intermediates are 
materials that are produced during preparation of the active ingredient 
and are not present in the finished drug product. We consider 
intermediates to be ``in-process materials'' rather than drug 
substances or components in the finished drug product (see 67 FR 65448 
at 65451 to 65452).
    (Comment 5 and Response) The comments that addressed this issue 
agreed with the proposal. Consequently,

[[Page 36681]]

the final rule does not allow submission of patents that claim 
intermediates for the reasons explained in the proposal.
    f. ``Double'' Patents--What Are They, and Must We Allow Them to Be 
Submitted? The proposal did not discuss ``double'' patents.
    (Comment 6) One comment suggested that we prohibit the listing of 
patents that contain a terminal disclaimer over a patent that had 
already been listed. The comment explained that patent law generally 
prevents an inventor from double patenting--that is, extending the term 
of the patent ``by the subsequent patenting of variations that are not 
patentably distinct from the first-patented invention.'' The comment 
stated that this ``double patenting'' can be cured if the patent holder 
files a ``terminal disclaimer'' which ``acts to disclaim the term of 
the later patent that extends beyond the term of the original patent, 
so that both patents expire on the same day.'' The comment expressed 
concern that NDA holders could list a later patent and have an 
opportunity to obtain a 30-month stay even if the later listed patent 
had a terminal disclaimer. In other words, the terminal disclaimer 
would prevent the inventor from enjoying a longer term of patent 
protection, but it would not prevent the imposition of another 30-month 
stay if the NDA holder or patent owner sued to enforce the later 
patent. The comment noted that, for the drugs PAXIL and FOSAMAX, the 
NDA holder had submitted earlier patents and a later-issued patent that 
had a terminal disclaimer. The patents were listed in the Orange Book, 
paragraph IV certifications were required for both patents and the NDA 
holder sued ANDA applicants on both patents, triggering 30-month stays.
    (Response) We acknowledge that the ``double patenting'' described 
by the comment may, indeed, provide an NDA holder an opportunity to 
obtain an additional 30-month stay under the prior interpretation of 
the act. Under the final rule, there is no opportunity for multiple 30-
month stays if patents with terminal disclaimers are submitted for 
listing. If such a patent is submitted after an ANDA applicant has 
filed a paragraph IV certification to a previously filed patent, and 
one full opportunity was provided for the 30-month stay, no notice need 
be given for a subsequent paragraph IV certification and no additional 
30-month stay for that ANDA applicant can result under the final rule.
    The act expressly contemplates listing of patents after NDA 
approval. It does not prevent an NDA holder or patent owner from 
submitting a patent with a terminal disclaimer. As long as the patent 
meets the statutory requirements, the patent must be submitted, even if 
it contains a terminal disclaimer. Again, we note that the PTO is 
responsible for the issuance of such patents. We defer to the PTO on 
matters of patent issuance.
    g. Method-of-Use Patents--Must the ``Use'' Be Approved in the 
Approved Drug Product? The preamble to the proposed rule mentioned that 
patents claiming a method of use would be able to be submitted, but did 
not address such patents except to confirm our position that patents 
may not be submitted for listing if they claim methods of use that are 
not approved for the listed drug or are not the subject of a pending 
application.
    (Comment 7) Comments disagreed as to whether the method-of-use 
claim in a patent submitted for listing must be a use approved in the 
NDA. Several comments urged us to list only those patents claiming 
methods of use approved in the NDA or that required clinical trials. 
One comment argued that listing only patents for approved uses was the 
only way to stop NDA holders from claiming broad uses or indications 
not in the approved labeling. In contrast, other comments argued that 
the act did not prevent NDA applicants or holders or patent owners from 
submitting patents for listing that claimed uses not approved by FDA. 
Some comments stated that patent infringement is not limited to 
approved uses. Other comments stated that section 505(b)(1) of the act 
contemplates the listing of patents claiming unapproved uses if a claim 
of patent infringement could reasonably be asserted, citing Purepac 
Pharm. Co. v. Thompson, 238 F. Supp. 2d 191 (D.D.C. 2002) (Purepac).
    (Response) If an NDA applicant or holder or patent owner intends to 
submit information on a patent that claims a method of use, the patent 
must claim a use that is described in the NDA. If we have already 
approved the NDA, the patent must claim a method of use that is in the 
labeling of the approved NDA. This has been our position since before 
we issued the final patent information rule in 1994 (see 59 FR 50338, 
50363-50364 (Oct. 3, 1994)). The pre-existing requirement can be found 
at Sec.  314.53(b) and (c)(2).
    Sections 505(b) and (c) of the act support our position that only 
patents claiming approved methods of use be submitted for listing. 
Section 505(b)(1) of the act provides that the NDA applicant ``shall 
file with the application the patent number and the expiration date of 
any patent which claims the drug for which the applicant submitted the 
application or which claims a method of using such drug * * * .'' The 
corresponding language in section 505(c)(2) of the act is nearly 
identical. Only method-of-use patents ``which claim the drug for which 
the applicant submitted the application'' must be listed. ``Drug'' is 
an ambiguous term, one which, for many years, we have consistently 
interpreted in the Hatch-Waxman Amendments to refer to the drug 
product. One court has said that:
    The meaning of the word ``drug'' in 21 U.S.C.Sec.  355(b)(1) 
cannot be determined apart from its context. Neither the FDA nor 
this court disputes that the definition of drug in Sec.  321(g) 
covers both drug products and active ingredients. The relevant 
statutory section in this case, however, modifies the word ``drug'' 
by attaching the phrase ``for which the applicant submitted the 
application.'' In that context the FDA's interpretation of drug as 
meaning drug product is consistent with and indeed required by the 
statute.
(See Pfizer, Inc. v. FDA, 753 F. Supp. 171, 176 (D. Md. 1990).) All of 
the benefits afforded NDA holders under the Hatch-Waxman Amendments, 
such as the 30-month stay, derive from obtaining our approval of a 
particular drug product. Accordingly, only method-of-use patents that 
claim a use of the drug product in the pending or approved application 
must be submitted. Method-of-use patents for uses that the NDA holder 
``has not chosen to make available to the public'' (id. at 177) must 
not be submitted for listing.
    This construction of the statute is also supported by the more 
recent case law. Since we issued the proposed rule, there have been 
several judicial opinions discussing method-of-use patents. In Purepac 
Pharm. Co. v. Thompson, 238 F. Supp. 2d 191 (D.D.C. 2002), and in the 
related case TorPharm, Inc. v. Thompson, Civ. No. 03-0254 (D.D.C. April 
25, 2003) (appeal pending for both Purepac and TorPharm), the district 
court held that, where a patent did not claim a use approved in the 
NDA, an ANDA applicant could not be required to certify to that patent, 
and the agency could properly find that no ANDA applicant was entitled 
to 180-day exclusivity on that patent. In Warner-Lambert Co. v. Apotex 
Corp., 316 F.3d 1348 (Fed. Cir. 2003), the Federal Circuit held that an 
ANDA applicant does not need to certify to a patent claiming a use not 
covered by the applicable NDA, and there is no cause of action against 
an ANDA applicant for patent infringement under 35 U.S.C. 271(e)(2)(A) 
for patents that claim an unapproved use. In Allergan, Inc. v. Alcon 
Labs., Inc., 324 F.3d 1322 (Fed.

[[Page 36682]]

Cir. 2003), the Federal Circuit issued a per curium opinion that held 
that a method-of-use patent holder does not have an infringement action 
against an ANDA applicant when the use claimed in the patent is not FDA 
approved and the ANDA applicant is not seeking approval of that use. 
These decisions are consistent with our position that sponsors must not 
submit method-of-use patents that do not claim an approved use for 
listing in the Orange Book. They also highlight the need for an 
improved declaration that will clarify the claimed scope of the method-
of-use patents being submitted.
    We have modified the required declaration relating to method-of-use 
patents submitted. Although we agree, as discussed in the response to 
comment 11 of section II.A of this document, that each individual claim 
of a patent does not need to be listed on the declaration forms for 
drug substance and drug product patents, we do require identification 
of individual claims for method-of-use patents. The declarant must 
describe each individual method of use for which a patent is submitted 
for listing, and identify the corresponding language found in the 
labeling of the approved NDA that corresponds to that method of use. 
This information will expedite our review of ANDA and 505(b)(2) 
applications that do not seek approval for all the approved uses. In 
determining whether an ANDA applicant can ``carve out'' the method of 
use, rather than certify to the listed patent, we will rely on the 
description of the approved use provided by the NDA holder or patent 
owner in the patent declaration and listed in the Orange Book.
    The need for accurate and detailed information related to the 
approved methods of use claimed in the patent being submitted for 
listing is underscored by the decision in Purepac Pharm. Co. v. 
Thompson, 238 F. Supp. 2d 191 (D.D.C. 2002). In that case, the NDA 
holder submitted information on a patent claiming what was later 
determined to be an unapproved use of the approved drug product. This 
submission was accompanied by the required signed declaration from the 
NDA holder that the patent covered the method of use for the approved 
product. Accordingly, we listed the patent and the use code information 
submitted with the patent. Years later, well after litigation over this 
patent was underway, the NDA holder clarified to FDA that the patent 
did not, in fact, claim the use for which the NDA was approved.
    This submission of inappropriate patent information led to 
confusion and then to litigation over an ANDA applicant's obligation to 
submit either a paragraph IV certification under section 
505(j)(2)(A)(vii)(IV) of the act or a ``section viii'' statement under 
section 505(j)(2)(A)(viii) of the act. The section viii statement, 
which is also applicable to 505(b)(2) applications, permits the ANDA or 
505(b)(2) applicant to avoid certifying to a patent by stating that it 
is not seeking approval for the use claimed in the listed patent. A 
section viii statement does not carry the requirement for notice to the 
NDA holder and patent owner, and the related opportunity for a 30-month 
stay.
    We have implemented the section viii provisions of the act by 
deferring to the NDA holder's or patent owner's assertion that the 
method-of-use patent claims an approved use of the drug product. When 
the NDA holder or patent owner submits a method-of-use patent for an 
approved NDA, we rely upon the requirements in the regulations and the 
required declaration as the evidence that the patent claims an approved 
use. Therefore, when an ANDA applicant has sought to duplicate the 
labeling for which the innovator has submitted the patent, and not to 
specifically omit, or ``carve out'' labeling, we require the ANDA 
applicant to submit a certification to that patent. A section viii 
statement would not be appropriate because the ANDA applicant is 
seeking approval for exactly the same labeling as that in the NDA for 
which the patent was submitted.
    Our position has been that, for an ANDA applicant to file a section 
viii statement, it must ``carve out'' from the proposed ANDA labeling, 
the labeling protected by the listed patent. Unless the ANDA applicant 
can show that it is carving out certain method-of-use labeling, a 
section viii statement is not a correct submission for the listed 
patent. In Purepac, the court rejected our reliance on the regulations 
and the general declaration as a reasonable basis for this approach to 
implementation. The court specifically pointed to the patent 
submissions in the case, and noted that the NDA holder had not complied 
with the requirement that NDA holders submit only those patents 
claiming an approved use for the drug. Although the court noted that 
the facts in Purepac were unique (the NDA holder later admitted that it 
made its submission ``without regard'' to FDA's regulations), there may 
be other cases in which NDA holders have submitted patents claiming 
unapproved uses of approved drug products.
    Following the Purepac decision, we have two options for 
implementing the section viii statement provisions under sections 
505(b)(2)(B) and 505(j)(2)(A)(viii) of the act that intersect with the 
patent submission considerations described in the proposed rule. One 
approach would be to permit each ANDA and 505(b)(2) applicant to make 
its own independent decision on whether a listed method-of-use patent 
claims the use for which the ANDA applicant seeks approval, and then to 
submit a paragraph IV certification or section viii statement as the 
applicant sees fit. The second approach would be to require the NDA 
applicant or holder to identify specifically the approved uses claimed 
by the method-of-use patent, with reference to the approved labeling, 
and declare under penalty of perjury that the patent claims an approved 
use. This would permit ANDA and 505(b)(2) applicants, and us, to assess 
whether the ANDA or 505(b)(2) applicant is seeking approval for a use 
the sponsor states is claimed in the listed patent, and thus determine 
whether the applicant must submit a patent certification or may submit 
a section viii statement under section 505(b)(2)(B) or 
505(j)(2)(A)(viii) of the act.
    In the absence of explicit statutory language, we believe an 
approach that requires the NDA applicant or holder or patent owner to 
identify the approved methods of use protected by the patent is most 
consistent with the general balance adopted in Hatch-Waxman. This 
approach permits the NDA applicant or holder to determine which patents 
claim its approved drug product and then, when appropriate, to resolve 
disputes over infringement of those patents through patent litigation. 
If ANDA and 505(b)(2) applicants could always avoid the possibility of 
a 30-month stay by asserting in a section viii statement that certain 
labeling for which the applicant is seeking approval is not protected 
by a listed method-of-use patent--despite the NDA holder's assertion to 
the contrary--there would be little reason for any applicant to submit 
a paragraph IV certification for a method-of-use patent. This approach 
would essentially eliminate the certification, notice, and litigation 
process as to any listed method-of-use patent, producing an outcome 
that is inconsistent with the act.
    To effectively implement the certification and section viii 
statement provisions set out in the statute, we must have adequate 
information concerning method-of-use patents. Since 1994, we have 
requested, but not required, that NDA applicants submit to FDA 
information on the approved use claimed by the patent. Since the

[[Page 36683]]

Purepac case and other instances have raised questions about what 
aspects of the approved drug are claimed by a listed use patent, we 
believe that it is necessary that an NDA holder submit more specific 
information on the approved methods of use protected by a submitted 
patent. Only with this information can we determine what submission is 
required of the ANDA and 505(b)(2) applicants referencing the approved 
drug.
    We further note that we list methods of use for approved products 
in the Orange Book in the section on use codes. Due to the limitations 
of our database system and software constraints, we are limited to 
using 240 total characters for the use code description in the Orange 
Book. Traditionally, we have created the use code description for the 
Orange Book from the information submitted by the NDA applicant or 
holder. After considering the comments, and in light of the previously 
described litigation, we have determined that it is more efficient and 
accurate to ask the NDA holder to give us the exact use code 
description to be published in the Orange Book. Use codes are intended 
to alert ANDA and 505(b)(2) applicants to the existence of a patent 
that claims an approved use. They are not meant to substitute for the 
applicant's review of the patent and the approved labeling. We 
understand that in some cases 240 characters may not fully describe the 
use as claimed in the patent. The declaration, which includes the 
complete description of the method-of-use claim and the corresponding 
language in the labeling of the approved drug, will be publicly 
available after NDA approval.
    h. Miscellaneous Patent Listing Comments. i. Should We Create an 
Administrative Process to Challenge Patent Listings or to De-List 
Patents or to Review the Listability of Patents? The proposed rule did 
not propose an administrative process for challenging patent listings 
or for seeking removal of a patent from the Orange Book, nor did we 
propose a new process to internally review the patents for listability.
    (Comment 8) Several comments stated that parties, such as generic 
drug companies and even third parties, need a method for challenging 
patent listings or for de-listing patents in the Orange Book. Some 
comments explained that the lack of an administrative procedure for 
challenging patent listings either encouraged NDA applicants to submit 
inappropriate patent information, or did not deter the practice, to 
delay generic competition. A number of comments maintained that FDA has 
more than a ministerial role and should review patents to determine if 
they meet the requirements for listing. Several comments contend that 
we have the authority to determine the attributes of the approved drug 
and thus to determine the appropriate patent listings. Various 
administrative mechanisms were suggested through which FDA could 
conduct a review of patents. These suggestions ranged from hiring 
patent lawyers to review submitted patents to development of a full 
administrative hearing process.
    One comment stated that patent owners need an administrative 
process to enforce the listing of their patents because an NDA holder 
might ``fail'' to list eligible patents.
    (Response) A fundamental assumption of the Hatch-Waxman Amendments 
is that the courts are the appropriate mechanism for the resolution of 
disputes about the scope and validity of patents. The courts have the 
experience, expertise, and authority to address complex and important 
issues of patent law. This final rule supports that assumption in two 
ways. First, the final rule clarifies what patents must and must not be 
submitted for listing. This will make it easier for NDA applicants and 
holders and patent owners to avoid inadvertently submitting patents 
that do not meet the statutory and regulatory requirements. The 
clarification will reduce the pressure on us to intercede in patent 
listing disputes and will allow the courts and parties to focus on the 
ultimate issue of patent invalidity or non-infringement. Second, the 
final rule requires NDA applicants or holders or patent owners to 
submit detailed information and to certify to its correctness. This 
should further ensure that only patents meeting the statutory 
requirements will be submitted for listing.
    We decline to create an additional administrative process for 
challenging patent listings beyond that already established in Sec.  
314.53(f). We also decline to create a new process for de-listing 
patents or for internal FDA review of patents beyond the limited review 
of the patent declaration described in this final rule. Section 
505(b)(1) of the act directs NDA applicants to submit certain patent 
information. It requires that ``[u]pon approval of the application, the 
Secretary shall publish'' the patent information (emphasis added). In 
section 505(j)(7)(A)(ii) and (iii) the statute mandates that we publish 
revisions to this information every 30 days. These short time frames do 
not contemplate a substantive agency review of the scope of the patent 
and its application to the approved drug product. Indeed, the 
requirement of prompt publication (``upon submission''), combined with 
the 30-day timeframe for updating the Orange Book, are strong evidence 
that Congress did not intend us to undertake anything other than a 
ministerial action.
    In addition to the absence of any statutory basis for a substantive 
agency review of patents, we have long observed that we lack expertise 
in patent matters. An administrative process for reviewing patents, 
assessing patent challenges, and de-listing patents would involve 
patent law issues that are outside both our expertise and our 
authority. Although we will continue to relay questions about the 
accuracy of a patent submission to the NDA holder (see Sec.  
314.53(f)), our patent listing role remains ministerial. Courts have 
upheld our determination that our role with respect to patent listing 
is ministerial. (See aai Pharma v. Thompson, 296 F.3d 227, 242-43 (4th 
Cir. 2002), cert. denied, 123 S. Ct. 1582 (2003); American Biosci., 
Inc. v. Thompson, 269 F.3d 1077, 1084 (D.C. Cir. 2001); In re Buspirone 
Patent Litigation, 185 F. Supp. 2d 363, 371 (S.D.N.Y. 2002); Watson 
Pharm., Inc. v. Henney, 194 F. Supp. 2d 442, 445-446 (D. Md. 2001); 
Mylan Pharm., Inc. v. Thompson, 139 F. Supp. 2d 1, 10-11 (D.D.C.), 
rev'd on other grounds, 268 F.3d 1323 (Fed. Cir. 2001).) We recognize 
that one court has held that parties have no private right of action to 
seek de-listing of patents (see Mylan Pharmaceuticals, Inc. v. 
Thompson, 268 F.3d 1323 (Fed. Cir. 2001)). Nevertheless, it would be 
inappropriate and impractical for us to create regulatory mechanisms 
for reviewing patent listings or permitting third parties to submit 
patents for listing. We lack both the resources and the expertise to 
resolve such matters.
    Furthermore, even if we were to establish an administrative process 
for patent review, our decisions on these patent listing matters would 
inevitably lead to disputes and increased litigation against us. This 
litigation could question whether such an administrative process was 
within our legal authority. Even if the courts were to decide that we 
may review submitted patents, there would be repeated litigation over 
individual patent listing decisions. Given the uncertainty of the 
listing status of the challenged patent during the litigation, there is 
no assurance that, if we reviewed submitted patents, ANDAs or 505(b)(2) 
applications would be approved sooner and generic drugs would enter the 
market any more rapidly.

[[Page 36684]]

    We agree that there have been a few cases in which legitimate 
concerns have been raised about whether specific submitted patents meet 
the statutory requirements for submission and listing. We believe that 
these concerns will be adequately and efficiently addressed by the 
clarification of the types of patents that must and must not be 
submitted and by improvements to the patent information required. We 
further believe that even if legally permissible, it is not necessary 
for us to develop a patent review mechanism. The final rule permits us 
to allocate our limited resources to public health activities, while 
leaving questions of patent law to the courts, which are better able to 
handle such questions. This division of responsibility is fully 
consistent with the process established in the Hatch-Waxman Amendments.
    (Comment 9) One comment suggested that we create an administrative 
mechanism to ensure timely patent infringement litigation if no 
statutory notice is provided to the NDA holder.
    (Response) We decline to amend the proposed rule as suggested by 
the comment. The act does not contemplate that we will play an active 
role in determining the timing of patent infringement litigation. In 
the absence of the 45-day timetable imposed when notice is given for a 
paragraph IV certification, a decision on whether and when to file suit 
for patent infringement may depend on multiple variables. For example, 
did the NDA holder or patent owner have sufficient information to 
decide whether to sue the ANDA or 505(b)(2) applicant for patent 
infringement? An ANDA applicant and the NDA holder may disagree on when 
the NDA holder had sufficient information to decide to file suit. The 
parties may also disagree as to what constitutes ``timely'' litigation. 
For example, an NDA holder who defers filing a lawsuit on a later-filed 
patent until a 30-month stay has elapsed may feel that the subsequent 
litigation is still ``timely,'' given the information available to the 
NDA holder. The ANDA or 505(b)(2) applicant may view this latter 
lawsuit as an obstacle to marketing its drug product. Given the limits 
of our statutory authority as well as complex issues of patent 
litigation strategy that lie outside our expertise, we decline to 
create a mechanism to ensure ``timely'' patent litigation in situations 
where the NDA holder and patent owner did not receive notice of 
subsequent paragraph IV certifications.
    ii. Should There Be Time Limits on Patent Submissions or 
Certifications? The proposed rule did not specify when patent 
information would need to be submitted, or whether ANDA or 505(b)(2) 
applicants would need to provide certifications for patents listed 
after they had filed an ANDA or 505(b)(2) application.
    (Comment 10) Several comments suggested revising the rule to create 
time limits relating to the submission of patent information or patent 
certifications. For example, one comment asserted that ``abuse'' occurs 
when NDA holders submit non-meritorious patent information to us 
shortly before an earlier-submitted patent is to expire. Another 
comment suggested that we limit the time during which NDA holders can 
submit patent information to a defined time period after we have 
approved their NDAs. Another comment said we should not require ANDA 
applicants to submit amended patent certifications if the patent was 
submitted after the first ANDA had been filed.
    Similarly, one comment asserted that a patent submitted after NDA 
approval cannot claim the approved drug product because the later-
submitted patent would be invalid. The comment explained that, under 
patent law, a person cannot obtain a patent if the subject of the 
patent is known and therefore ``anticipated'' under patent law.
    (Response) We decline to amend the proposed rule as suggested by 
the comments. The act clearly contemplates the submission of additional 
patent information after an NDA has been filed. For example, section 
505(b)(1) of the act instructs applicants to amend their NDAs to 
include information on a patent issued after the NDA has been filed, 
but before the NDA has been approved, which claims the drug or a method 
of using the drug that is the subject of the application. Section 
505(c)(2) of the act directs NDA holders to submit patent information 
if the patent issued after we have approved the NDA. We do not 
interpret the act as permitting us to refuse to accept submissions of 
new patents either after an NDA has been filed or approved, or after an 
ANDA has been submitted.
    Section 505(c)(2) of the act also instructs NDA holders to submit 
information on patents issued after NDA approval no later than 30 days 
after the date the patent issued. This deadline ensures prompt public 
notice that the NDA holder believes the patent claims the approved drug 
product and permits legal issues regarding these later-issued patents 
to be resolved as early as possible. Under Sec.  314.94(a)(12)(vi), we 
do not require an ANDA or 505(b)(2) applicant with a pending 
application to certify to a patent issued after NDA approval but not 
submitted to us within 30 days after issuance. However, the patent will 
be listed in the Orange Book upon submission of a complete declaration, 
and ANDA and 505(b)(2) applications filed after the patent is listed 
will be required to contain a certification to the patent. This 
longstanding interpretation is consistent with the statutory language 
describing patent submission deadlines, the notice concept inherent in 
patent publication, and early judicial resolution of patent disputes. 
We are not persuaded by the comments that we should change our 
interpretation.
    We believe that removing the possibility of multiple 30-month stays 
per ANDA will diminish the incentive to obtain additional patents late 
in the patent life of the product described in the NDA. As described in 
the FTC Report, of the patents reviewed by FTC, many of the patents 
submitted well after NDA approval, and usually after an ANDA 
application was filed, were ultimately found to be invalid. Therefore, 
in the absence of the 30-month stay, these patents would have been 
unlikely to serve as a basis for a preliminary injunction precluding 
market entry of generic drugs.
    We also decline to amend the proposed rule to exempt ANDA 
applicants from submitting patent certifications if the patent was 
listed after the ANDA was filed. Our pre-existing regulations do not 
require ANDA applicants to amend their patent certifications if:
    [sbull] The NDA holder failed to provide the required patent 
information within 30 days after the issuance of the patent; and
    [sbull] The ANDA had already been submitted and had contained an 
appropriate patent certification before the submission of new patent 
information (see Sec.  314.94(a)(12)(vi)).
    However, if the NDA holder has submitted patent information in a 
timely manner, consistent with section 505(c)(2) of the act, then 
section 505(j)(2)(A)(vii) of the act requires the ANDA applicant to 
certify to that patent. Section 505(j)(2)(A)(vii) of the act requires 
ANDA applicants to provide a certification with respect to ``each 
patent which claims the listed drug,'' not only patents that are listed 
at the time the ANDA is submitted. The act contemplates the submission 
of patent certifications even if the patent was listed after the ANDA 
or 505(b)(2) application had been submitted.
    We do not have the authority to declare any patent to be invalid. 
We leave questions regarding the issuance

[[Page 36685]]

and validity of patents to the PTO and the courts.
    iii. What Should the Patent Declaration Say? (Proposed Sec.  
314.53(c)). Proposed Sec.  314.53(c) would require a patent declaration 
for NDA applicants and holders and patent owners to complete as part of 
the NDA, an amendment, a supplement, or for information on a later-
issued patent. The proposed revised declaration in the proposal was a 
``checklist'' that focused on individual patent claims. The proposed 
declaration required information on each claim to help ensure that 
applicants submit only appropriate patent information, and that they 
stand behind the accuracy of the information. The proposed requirement 
to identify claims was intended to help all parties focus on the same 
claim and help prevent arguments as to whether a particular claim 
claimed the approved drug product.
    (1) Should the Declaration Identify Individual Patent Claims?
    (Comment 11) Several comments objected to identifying patent claims 
as part of the declaration. The comments stated that a claim-by-claim 
listing:
    [sbull] Would be ``unnecessarily onerous'' because patents may 
contain many claims;
    [sbull] Could threaten the patent holder's legitimate rights if the 
NDA applicant failed to list a patent claim because the failure to list 
that claim could be used as an admission against the NDA holder's or 
patent owner's interests in litigation;
    [sbull] Could expose the NDA holder to criminal and civil liability 
if the claim cited in the declaration is later found not to claim the 
drug; or,
    [sbull] Is irrelevant to patent listing because the patent, and not 
the patent claims, is what we must list in the Orange Book.
    Other comments supported the claim-by-claim listing. Some comments 
requested that we impose a 30-month stay only if the specific claims 
submitted in the patent declaration were the subject of the patent 
litigation filed within the 45-day time period.
    (Response) We have re-examined our rationale for proposing a claim-
by-claim listing and have concluded that submission of a claim-by-claim 
declaration for all patents is not warranted. Such detailed information 
is not explicitly required by the act and is not necessary for a patent 
to be listed in the Orange Book. Section 505(b)(1) of the act requires 
that the patent be one that ``claims the drug for which the applicant 
submitted the application or which claims a method of using such drug 
and with respect to which a claim of patent infringement could 
reasonably be asserted * * *.'' The number of claims contained within a 
particular patent does not affect the ability of the patent to be 
listed as long as there is at least one claim that meets the two 
required elements.
    Individual patent claims are relevant for purposes of the Orange 
Book only in the context of method-of-use patents. The specific method-
of-use claims are essential to our review because sections 
505(j)(2)(A)(viii) and 505(b)(2)(B) of the act allow ANDA and 505(b)(2) 
applicants to file statements which assert that the method-of-use 
patent does not claim a use for which the applicant is seeking 
approval. The ANDA or 505(b)(2) applicant does not have to seek 
approval for all uses approved for the reference listed drug. Thus, the 
claim-by-claim listing of method-of-use patents will permit ANDA and 
505(b)(2) applicants to assess whether they are seeking approval for a 
use claimed in the listed patent, and thus determine whether to submit 
a patent certification or a section viii statement. Additionally, we 
can verify that the certification or statement is correct, and that 
only the appropriate methods of use are included in the proposed 
labeling for the ANDA or 505(b)(2) drug product.
    We decline to adopt the recommendation made in some comments to 
require all claims to be listed and then provide a 30-month stay only 
for litigation involving a claim listed in the Orange Book. This 
suggestion would require us to significantly exceed our ministerial 
responsibility in listing patents because we would be obliged to 
evaluate patent lawsuits and their relation to individual patent 
claims. We discuss our ministerial role in the response to comment 8. 
Removing the proposed requirement of a claim-by-claim listing in the 
final rule should not be detrimental to ANDA or 505(b)(2) applicants. 
In fact, several generic companies, the FTC and the Generic 
Pharmaceutical Association (GPhA), stated in their comments that no 
``prudent generic company'' would rely solely on Orange Book listings 
to evaluate patent information for litigation exposure, particularly 
when all patents cannot be listed in the Orange Book. Thus, we believe 
that identification of the relevant patent(s), as opposed to the 
individual patent claims (other than for method-of-use patents), 
satisfies the act's explicit requirements, provides sufficient 
information to potential applicants to determine if a more thorough 
patent search or analysis is warranted, and will help to ensure 
appropriate patent submissions.
    (2) Should the Declaration Be Expanded or Modified? The proposed 
rule would revise Sec.  314.53(c)(2) and would replace the existing, 
general declaration with a more detailed declaration. The proposed 
declaration would be a ``checklist'' that required information on the 
approved drug product including trade name, active ingredient(s), 
strength(s), dosage form(s), and approval date. For each patent 
submitted, each claim of a patent which applied to the drug substance 
(active ingredient), drug product (formulation or composition), and 
method of use would need identification. A ``yes'' or ``no'' check-off 
would be required as to each individual applicable patent claim. The 
proposed Sec.  314.53 would require the NDA applicant or holder or 
patent owner to state in the declaration that the information was 
provided for an NDA submitted under section 505 of the act.
    (Comment 12) Several comments supported our proposed changes to the 
declaration but also suggested additions to the declaration. These 
comments would add the following information to the declaration:
    [sbull] Specific exclusions of patents for forms of the active 
ingredient not marketed, such as acids, freebases, salts, and isomers;
    [sbull] Exclusion of patents claiming labeling matters such as 
business methods, registries, titration/dosing schedules, or ornamental 
designs;
    [sbull] Exclusion of a patent claiming a drug substance claimed in 
conjunction with another active ingredient or method of using the 
combination which is not the claimed drug substance;
    [sbull] Various forms of statements indicating or certifying the 
submitter has filed accurate information;
    [sbull] Identification of the NDA applicant's pending patent 
applications; and
    [sbull] Additional information for product-by-process patents.
    The comments suggested that it was necessary to identify each of 
the excluded patents in the declaration form and the codified text. 
Several comments suggested requiring a sworn statement and an 
acknowledgement that a false statement was subject to criminal 
penalties. For example, one comment suggested that the declaration 
include the statement: ``The undersigned declares that all of the above 
information has been provided in accordance with Title 28, section 
1746, entitled `Unsworn declarations under penalty of perjury','' 
followed by the signature, date, title, and telephone

[[Page 36686]]

number. The comment also would require additional information on 
patents in the declaration form to identify that the product in the 
product-by-process patent was a novel product.
    (Response) We agree, in part, with the comments that the 
information that would be required in the declaration should be 
modified. Also, we have created standardized declaration forms which 
will encompass the required patent declaration information.
    The final rule changes the general requirements in pre-existing 
Sec.  314.53(c)(1) by requiring that the patent information which must 
be submitted must be provided on the declaration forms in full. In 
final Sec.  314.53(c)(2), we substitute declaration forms which must be 
used in place of the checklist described in the proposed rule. Each 
declaration form is a standard form that must be used by all NDA 
applicants or holders or patent owners for submission of patent 
information at the time of initial NDA or supplement filing, and upon 
and after NDA or supplement approval.
    For several years our Internet Web site has included a sample 
format which can be used in submitting patent information required 
under pre-existing regulations. Although use of the sample format is 
purely voluntary, it is used extensively to submit patent information 
to us. Based on this experience, and given the additional information 
required in the final rule, we concluded that mandatory declaration 
forms are appropriate to obtain the patent information. We, thus, 
require use of forms in the final rule. Since we determined that forms 
are appropriate, we have consolidated information currently required by 
pre-existing regulations with the new required information. For 
example, we require a response on whether there are relevant patents 
related to the drug product, information currently required under pre-
existing Sec.  314.53(c)(3). This was not contained in the proposal 
but, for administrative efficiency, and to lessen the burden on NDA 
applicants or holders or patent owners, we have included in the 
declaration forms all of the required information relating to the 
patent submission.
    The NDA applicant must provide a declaration form when an NDA, 
amendment, or supplement to an NDA is filed. The NDA holder must also 
submit another declaration form after NDA or supplement approval to 
provide information on all patents relevant to the approved NDA or 
supplement, whether or not information on any such patent was 
previously submitted. The declaration forms filed with us must be 
attested to as to the accuracy of the patent information being 
submitted. Examples of the two declaration forms, FDA Form 3542 and 
3542a, are provided in the Appendix found at the end of this document. 
The declaration forms will be available on the Internet at http://www.fda.gov by searching for the word ``forms''.
    The final rule also revises pre-existing Sec.  314.53(c)(2)(ii) and 
(c)(3) to conform to the changes we made to the patent information 
required on the declaration forms. The final rule requires a 
declaration form to be filed with us within 30 days after NDA approval; 
this is consistent with the pre-existing requirement. This form must 
also be used to file patent information on any patents submitted or 
issued after NDA approval. This declaration form requires the NDA 
holder or patent owner to provide the patent information applicable to 
the approved NDA. It is similar to the declaration form filed upon the 
filing of an NDA, supplement, or amendment. However, the declaration 
form filed upon or after NDA approval requires information on the 
approved product and a description of the approved methods of use for 
the use code listing in the Orange Book. This description will be 
limited to 240 characters as discussed in the response to comment 7.
    The final rule describes other information required for the 
declaration forms not identified in the proposed rule. Some of the 
additional information will allow us to more easily determine the 
eligibility of the patent for listing, while other information will 
provide more complete information related to the responsibilities of 
the NDA holders or ANDA applicants. For example, we require the issue 
date of the patent in order to determine whether the patent has been 
submitted to us within the required 30 days. We require information on 
whether the patent being submitted has been submitted previously for 
the NDA or supplement referenced in the declaration. For example, an 
earlier listed patent may have included several method-of-use claims 
but only one method of use previously approved and submitted. A second 
method of use may be approved in a supplement and must be submitted for 
listing. Such information will assist the Orange Book staff with its 
administrative listing responsibilities. The address and contact 
information of the patent owner required in the declaration forms will 
assist in the required notification to the patent owner of a paragraph 
IV certification. We have elaborated on the requirement for asserting 
that the polymorph is the ``same'' as the active ingredient approved in 
the NDA. We require information on whether the patents submitted claim 
metabolites or intermediates to help ensure that the patents prohibited 
from submission under final Sec.  314.53(b) are not submitted. 
Similarly, we require information on patents claiming the drug product 
to prevent the submission of patents claiming packaging.
    The final rule also requires information on product-by-process 
patents as discussed in the response to comment 2 of section II.A of 
this document. We have added a requirement that the NDA applicant or 
holder or patent owner state whether the patent being submitted is a 
product-by-process patent in which the product claimed is novel. This 
is to help ensure that process patents are not submitted for listing.
    We agree that the attestation in the declaration form should be 
revised in the final rule. In the proposal, we stated that we had 
revised the declaration so that applicants would ``make careful and 
well-considered representations'' and ``stand behind the accuracy of 
that information'' (see 67 FR 65448 at 65453). In the final rule, we 
revise the statement to be more specific about the need to ensure the 
information is accurate. We adopt the attestation statement contained 
in 28 U.S.C. 1746 for unsworn declarations and include attestations in 
the declaration forms. The attestation statements in the declaration 
forms read as follows:
    (Declaration Form 3542a submitted with NDA, amendment or 
supplement.)
    The undersigned declares that this is an accurate and complete 
submission of patent information for the NDA, amendment, or 
supplement pending under section 505 of the Federal Food, Drug, and 
Cosmetic Act. This time-sensitive patent information is submitted 
pursuant to 21 CFR 314.53. I attest that I am familiar with 21 CFR 
314.53 and this submission complies with the requirements of the 
regulation. I verify under penalty of perjury that the foregoing is 
true and correct.
    (Declaration Form 3542 submitted upon or after NDA approval.)
    The undersigned declares that this is an accurate and complete 
submission of patent information for the NDA or supplement approved 
under section 505 of the Federal Food, Drug, and Cosmetic Act. This 
time-sensitive patent information is submitted pursuant to 21 CFR 
314.53. I attest that I am familiar with 21 CFR 314.53 and this 
submission complies with the requirements of the regulation. I 
verify under penalty of perjury that the foregoing is true and 
correct.
We also include a warning statement in the declaration forms to alert 
the submitter that a willfully and knowingly false statement is a 
criminal offense under 18 U.S.C. 1001.

[[Page 36687]]

    We decline to revise the proposed rule to list every excluded type 
of patent as requested by some comments. Based on our experience, we 
believe that if we attempted to include questions on all types of 
patents, such as ``business method'' or ``registry'' patents, or 
specifically list all exclusions in the final rule, there would be 
disagreements over whether the examples are all-inclusive or whether 
other types of patents were excluded as well. We believe the patent 
information requested is sufficient to ensure only eligible patents are 
submitted for listing.
    We also decline to revise the declaration to require identification 
of an NDA applicant or NDA holder's patent applications that are under 
review by the PTO. The act does not contain any references to pending 
patents. In contrast, sections 505(b) and 505(c)(2) of the act contain 
requirements for patent information to be submitted after the patent is 
issued. Section 505(b) of the act requires that the information 
submitted on any patent claiming the drug include the patent number and 
expiration date of the patent. We publish that information when we list 
the patent in the Orange Book. A patent number and expiration date are 
available only when the PTO issues a patent and are not available for 
pending patent applications. Accordingly, we will not require 
submission of information regarding pending patent applications.
    Although we do not require submission of information concerning 
pending patent applications, we understand that pending patent 
applications are generally publicly disclosable by the PTO if pending 
for more than 18 months at the PTO or foreign patent offices. In 
addition, information concerning pending patents would not provide any 
useful information if the PTO never issued the patent.
    We note that we will not evaluate a patent to assess whether the 
declaration is accurate or whether the patent has been appropriately 
submitted for listing (see our response to comment 8). We will, 
however, review the declaration for completeness and to determine that 
the information given by the NDA applicant or holder or patent owner 
indicates that the patent is eligible for listing.
    Although section 505(b)(1) of the act requires submission of patent 
information upon the filing of an NDA, we will rely only on the 
declaration form filed upon or after NDA approval under Sec.  
314.53(c)(2)(ii) to list patent information in the Orange Book. Patent 
information for newly approved NDAs, NDA supplements, or newly issued 
patents will not be published in the Orange Book unless and until we 
receive a complete declaration submitted post-NDA approval indicating 
the patent is eligible for listing.
    We interpret the statute to permit listing of only those patents 
claiming the approved drug product and its approved uses. Even though 
the NDA applicant must submit patent information prior to NDA approval, 
it is not until the NDA or supplement has been approved that the scope 
of that approval is known. For example, we might approve only one of 
two indications proposed in an NDA and, thus, patents on an unapproved 
indication or use, although submitted with the original NDA, could not 
be listed. Therefore, as a way of confirming or amending the original 
patent information, a declaration form must be submitted after 
approval. If the declaration form submitted after NDA approval is 
incomplete or indicates a patent is not eligible for listing, we will 
notify the NDA holder and indicate the reason. The NDA holder must 
resubmit the declaration form with complete information indicating that 
the patent is eligible for listing. If the declaration form is 
incomplete or indicates the patent is not eligible for listing, we will 
refuse to list the patent until an appropriate declaration form has 
been submitted.
    For patents newly issued by the PTO after the NDA is approved, 
section 505(c)(2) of the act requires that the NDA holder submit the 
patent information to us within 30 days to be considered timely filed. 
All such patent information must be contained in a complete declaration 
submitted post-NDA approval indicating that the patent is eligible for 
listing. A patent is considered listed in the Orange Book as of the 
date it is received in the Central Document Room as required in Sec.  
314.53(d)(4) and (d)(5), if it is accompanied by a declaration form 
that is both complete and contains information indicating that the 
patent is eligible for listing. If we must notify an NDA holder that a 
declaration form is incomplete or the patent is not eligible for 
listing, and the NDA holder then submits an acceptable declaration 
within 15 calendar days, we will consider the patent timely filed. So, 
for example, suppose an NDA holder submits information on a new patent 
to us 20 days after the patent is issued by PTO, and we notify the NDA 
holder 5 days later that the declaration is incomplete. If the NDA 
holder submits an adequate declaration within 15 calendar days of the 
notification, we will consider the patent information to have been 
submitted as of the date we originally received it, that is, within the 
30 day period allowed by the statute. If the NDA holder submits the 
adequate declaration more than 15 calendar days after notification, we 
will consider the patent information to have been submitted on the day 
the revised declaration form is received, which may be more than 30 
days after the date of patent issuance. Such patents will be subject to 
patent certification only as described in Sec.  314.94(a)(12)(vi). If 
the NDA holder does not submit an adequate declaration for the newly 
issued patent, we will not list the patent in the Orange Book. This 
approach is appropriate because it gives the NDA holder who promptly 
submits information on a newly-issued patent a reasonable period of 
time to correct a mistake in a patent declaration, while at the same 
time ensuring that there are adequate declarations and minimal delays 
for listed patents. We will accept certifications to any patent only 
from the date an acceptable declaration is submitted.
    The process established in Sec.  314.53(f) for patent listing 
challenges is not altered by our requirements for patent information 
and declaration forms. Interested parties may still rely on that 
process if they believe a patent has been submitted and listed in 
error.
    We are aware of NDA holders that have submitted patents for listing 
that have been listed in the Orange Book and then, at a later time, 
been removed from the Orange Book at the NDA holder's request. If, 
after the patent has been removed from the Orange Book, the NDA holder 
again seeks to submit the patent for listing, we will require 
resubmission of the patent information and the filing of an 
accompanying patent declaration before the patent will be relisted. 
Such resubmission will be governed under the final rule. If the 
resubmission of a previously listed patent takes place after the 
effective date of this rule, the final rule applies as described in 
section IV of this document.
    The final rule does not require us to review or evaluate patents, 
but will simplify and clarify the submission process for NDA applicants 
and holders and patent owners, and will promote administrative 
efficiency. The additional information required by the declaration form 
will help ensure that only appropriate patents are submitted for 
listing.

[[Page 36688]]

2. How Many Times Can an ANDA or Sec.  505(b)(2) Application's Approval 
Date Be Delayed by 30-Month Stays?
    The proposed rule offered an interpretation of the act that would 
limit the number of 30-month stays to only one possible stay per ANDA 
or 505(b)(2) application. The proposed interpretation in the proposed 
rule differed from our previous interpretation of the act (which 
allowed for multiple 30-month stays). Under our proposed 
interpretation, the ANDA or 505(b)(2) applicant would continue to file 
the appropriate certifications as required under section 
505(j)(2)(A)(vii)(I) through (j)(2)(A)(vii)(IV) or section 
505(b)(2)(A)(i) through (b)(2)(A)(iv) of the act. However, under the 
proposed interpretation in the proposed rule, the notice to the NDA 
holder and patent holder of the paragraph IV certification is required 
only when a paragraph IV certification is included in the initial ANDA 
or 505(b)(2) application or when such an application is amended to 
include, for the first time, a paragraph IV certification. Notice to 
the NDA holder and patent owner is one of the requirements for a 30-
month stay; if the ANDA or 505(b)(2) applicant is not obliged to 
provide a subsequent notice to the patent owner and NDA holder, no 
successive 30-month stay is possible.
    a. When Must Notice Be Provided and What Is a Full Opportunity for 
a 30-Month Stay? The proposed rule would require an ANDA or 505(b)(2) 
applicant to provide notice to NDA holders and patent owners only when 
the applicant files a paragraph IV certification with the initial 
application or amends the application to include a paragraph IV 
certification for the first time. If the application were amended to 
add additional paragraph IV certifications, no notice to the NDA holder 
and patent owner would be required.
    (Comment 13) Several comments claimed that the lack of notice for 
subsequent paragraph IV certifications would delay initiation of patent 
litigation. To avoid this ``delay,'' the comments suggested that, if we 
retained our proposed interpretation allowing only one 30-month stay 
per ANDA or 505(b)(2) application, we should amend the rule to:
    [sbull] Give the ANDA applicant the ``option'' to provide voluntary 
notification;
    [sbull] Give the ANDA applicant the ``option'' to provide 
notification and be subject to an ``optional'' additional 30-month 
stay;
    [sbull] Require us to notify the NDA holder as to a subsequent 
paragraph IV certification.
    Similarly, several comments expressed concerns that ANDA and 
505(b)(2) applicants could manipulate the rule to avoid even a single 
30-month stay. The comments explained that in the absence of notice for 
all paragraph IV certifications, there could be several scenarios in 
which an ANDA or 505(b)(2) applicant could take advantage of the 
regulations to avoid a meaningful 30-month stay under our revised 
interpretation. For example, an ANDA or 505(b)(2) applicant could file 
a paragraph IV certification on a narrow patent or a narrow patent 
claim and provide notice to the NDA holder and patent owner on that 
certification, thereby satisfying the regulatory requirements, while 
providing a paragraph III certification on broader patents or claims. 
The NDA holder or patent owner could bring a patent infringement suit 
within the 45 days, triggering a 30-month stay, or decide not to bring 
suit on the narrow claim or patent. The comments argued that, after 
suit was filed, or after the 45 days expired with no suit initiated, 
the ANDA or 505(b)(2) applicant could change the paragraph IV 
certification to a paragraph III. If suit had been filed, the applicant 
could seek dismissal of the patent infringement suit and avoid the 30-
month stay. At a later date, the ANDA or 505(b)(2) applicant could 
change its paragraph III certification on the broader patent or claim 
to a paragraph IV certification, but because there had already been an 
opportunity for a 30-month stay, no further 30-month stay would be 
possible.
    The comments maintained that we should not allow such manipulation 
and that it could be avoided by treating the new or revised 
certification as though it relates back to, and substitutes for, the 
original certification so that the notification requirements for 
original applications, and not those for amendments, apply. Under this 
suggested approach, the changed paragraph III certification would be 
treated as if the original application had contained the paragraph IV 
certification. The new certification, thus, would require notice to the 
NDA holder and patent owner and have the potential to trigger a 30-
month stay. The comment cited Sec.  314.94(a)(12)(viii) which relates 
to amended certifications to support this approach. In this instance, 
it was argued that there should be the opportunity for at least one 30-
month stay when the ANDA or 505(b)(2) applicant ``alters or amends'' a 
patent certification for reasons other than the listing of a patent 
subsequent to the filing of an ANDA.
    (Response) We decline to modify the proposed rule as suggested. We 
conclude, however, that clarification of the proposed rule is required 
in the final rule to ensure that our revised interpretation allows for 
one full opportunity for a 30-month stay after notice of a paragraph IV 
certification.
    Our long experience with administering the Hatch-Waxman Amendments 
convinces us that any regulatory scheme in this area will be complex, 
and that any advantage that a party can find in manipulating the 
regulatory program will be pursued. Despite our conviction that the 
final rule will substantially reduce such manipulation, we do not 
believe we can completely prevent attempts at ``creative compliance'' 
by the parties.
    Our revised interpretation of the statute reads all three 
subparagraphs of section 505(j)(2)(B) of the act as a coherent whole. 
We believe that Congress considered the first paragraph IV 
certification, notice and the opportunity for a single 30-month stay, 
to be part of an inter-connected process. In the final rule we keep 
these provisions operating together, as much as possible, requiring 
that certifications be made and notification provided in such a way 
that there always will be one full opportunity for a 30-month stay.
    The notice requirement in the final rule depends on whether the 
ANDA or 505(b)(2) application contained a paragraph IV certification 
before the submission of an amendment containing a paragraph IV 
certification. We note three potentially confusing situations 
concerning applicability of that principle and describe how these will 
be treated under the final rule.
    First, an ANDA or 505(b)(2) applicant who filed a paragraph IV 
certification could change to a paragraph III certification after 
notice is given but before the 45 days for filing suit has run and 
before a suit is filed. In this situation, because the opportunity for 
a 30-month stay has not vested (the 45 days has not expired or patent 
litigation has not yet been initiated), under the final rule, this ANDA 
or 505(b)(2) application will not be considered to have ever included a 
paragraph IV certification. If a paragraph IV certification is 
submitted later, the notice obligation and one full opportunity for a 
30-month stay will attach. This ensures that, consistent with the 
statute, for at least one paragraph IV certification, the NDA holder or 
patent owner has a full 45 days to determine whether to exercise the 
right to sue for patent infringement

[[Page 36689]]

and to obtain a 30-month stay on ANDA or 505(b)(2) approval. The phrase 
``one full opportunity for a 30-month stay'' used throughout this 
preamble means a notice of a paragraph IV certification followed by 
either the full 45 day period, or notice followed by the initiation of 
patent litigation before the 45 days expire.
    Only where both the 45 days have not run and the ANDA or 505(b)(2) 
applicant has not been sued for patent infringement will this exception 
apply. If the NDA holder brings suit before the 45 days, and the ANDA 
or 505(b)(2) applicant then changes its application to omit any 
paragraph IV certifications, the court where suit is pending can 
determine how to proceed.
    For effective enforcement of this provision of the regulations, 
notice of the first paragraph IV certification(s) must be given by the 
ANDA or 505(b)(2) applicant either: (1) When the applicant receives 
from us an acknowledgement that the ANDA or 505(b)(2) application is 
sufficiently complete to permit substantive review, or (2) at the same 
time that the amendment to the ANDA or 505(b)(2) application is 
submitted to us. These requirements are already contained in our 
regulations at Sec.  314.95(b) and (d) and Sec.  314.52(b) and (d). 
(These also apply to a second notice of a paragraph IV certification 
when the first notice did not result in a full opportunity for a 30-
month stay.) The importance of ANDA and 505(b)(2) applicants providing 
this notice was recently reaffirmed in TorPharm, Inc. v. Thompson, Civ. 
No. 03-0254 (D.D.C. April 25, 2003) (appeal pending). ANDA and 
505(b)(2) applicants shall submit proper documentation of notice to us 
as required by Sec. Sec.  314.95(e) and 314.52(e).
    Second, an applicant who filed a paragraph IV certification with 
its original ANDA or 505(b)(2) application could change its paragraph 
IV certification (generally to a paragraph III certification) after a 
patent infringement suit is filed and after the 30-month stay has 
commenced. Such a change could occur, for example, as a result of a 
court order after a finding of infringement in the patent litigation. 
In this circumstance, an application that previously contained a 
paragraph IV certification would no longer do so. If such an 
application is subsequently amended to add a new paragraph IV 
certification, the notice obligation will not be triggered for the new 
certification. The notice requirement and one full opportunity for 30-
month stay will have been exhausted when the first patent lawsuit was 
filed and a 30-month stay was imposed.
    The third situation could occur when an applicant withdraws an ANDA 
or 505(b)(2) application that contained a paragraph IV certification 
after it has provided notification to the NDA holder and patent owner. 
If an ANDA or 505(b)(2) applicant were to reactivate its withdrawn 
application, it might contend that the notice that it provided prior to 
withdrawal of the ANDA or 505(b)(2) application was the only notice 
that could trigger a 30-month stay, regardless of whether the 45 day 
period had run, whether patent infringement litigation was initiated, 
or whether that litigation was terminated because of withdrawal of the 
application.
    Our pre-existing regulations prevent an applicant from using 
withdrawal to defeat the opportunity for one 30-month stay. Under 
Sec. Sec.  314.52(b) and 314.95(b), the applicant is not to give notice 
until it receives an acknowledgement letter from us stating that its 
application is sufficiently complete to permit review. Any notice sent 
prior to receipt of such letter will not constitute the notice that 
creates the full opportunity for the single 30-month stay.
    Once the review period begins, an application may not be withdrawn 
and then ``reactivated.'' If the ANDA or 505(b)(2) application is 
withdrawn during the review period, we ``will treat the resubmission as 
a new application or abbreviated application'' under Sec.  314.100(b). 
If the applicant wishes to have the withdrawn ANDA or 505(b)(2) 
application reviewed, it must submit it as a new ANDA or 505(b)(2) 
application. The ``decision to withdraw the application is without 
prejudice to refiling'' as noted in Sec.  314.65. However, we will 
treat the new ANDA or 505(b)(2) application in the same manner as any 
other original application. The applicant will be required to provide 
notice for paragraph IV certifications contained in the new ANDA or 
505(b)(2) application, with the possibility of a single 30-month stay. 
If the new ANDA or 505(b)(2) application contains no paragraph IV 
certification, notice must be provided if it is later amended to 
include such a certification. In short, withdrawal of an ANDA or 
505(b)(2) application will not defeat the opportunity for a 30-month 
stay of approval for the resubmitted ANDA or 505(b)(2) application.
    We do not agree that Sec.  314.94(a)(12)(viii) supports a 
``relation back'' theory. The provision does provide that when an ANDA 
or 505(b)(2) applicant changes a certification in its application, 
``the application will no longer be considered to contain the prior 
certification,'' but it cannot be read to suggest that the application 
will be considered to have contained only the changed certification 
retroactively to the date that the original certification was filed. If 
interpreted in that manner, an ANDA or 505(b)(2) applicant could amend 
certifications to other patents and make them paragraph IV 
certifications. Among other difficulties, an applicant could then argue 
that, by virtue of relating back, such a paragraph IV certification was 
the ``first'' application with a paragraph IV certification, 
potentially entitling the applicant to exclusivity under section 
505(j)(5)(B)(iv) of the act. This theory would lead to absurd results 
in the application of 180-day exclusivity.
    Furthermore, we note that ANDA applicants have substantial 
incentives to avoid manipulation of the patent certification process. 
The 180-day marketing exclusivity provided in section 505(j)(5)(B)(iv) 
of the act is a significant incentive for ANDA applicants to file 
legitimate paragraph IV certifications. Exclusivity as to each listed 
patent is available only to the first ANDA applicant filing a paragraph 
IV certification. Frequently, there is a race to submit the first 
paragraph IV certification. Consequently, given this incentive, we do 
not anticipate that ANDA applicants will manipulate their patent 
certification filings, because they could jeopardize their chances of 
obtaining the valuable 180-day exclusivity.
    We encourage ANDA and 505(b)(2) applicants to resolve their 
concerns about commencing litigation quickly by providing voluntary 
notice to the NDA holder and patent owner as they wish. There is 
nothing in the final rule to prevent ANDA or 505(b)(2) applicants from 
providing notice on their own initiative, nothing to prevent NDA 
holders or patent owners from responding with patent litigation, and 
nothing to prevent ANDA or 505(b)(2) applicants from not marketing 
during the litigation. To the extent that ANDA or 505(b)(2) applicants 
seek resolution of outstanding patent issues before entering the 
market, we note that the applicant can file a declaratory judgment 
action (as discussed below) and enter into a stipulated preliminary 
injunction pursuant to which the ANDA or 505(b)(2) applicant will not 
enter the market during the course of the litigation. Such a 
stipulation, of course, must be consistent with FTC precedent and 
established antitrust requirements. Information on pertinent FTC 
consent orders may be obtained from the FTC or its Internet Web site.
    The interpretation we are adopting in the final rule allows only 
one 30-month stay per ANDA or 505(b)(2) application;

[[Page 36690]]

it does not permit multiple 30-month stays. Revising the rule to impose 
additional 30-month stays would be contrary to our interpretation of 
the act and the reasons for the rulemaking. Furthermore, requiring 
notice and imposing a second full opportunity for an additional 30-
month stay under the circumstances described would be inconsistent with 
our legal basis for a single 30-month stay since we permit notice and 
one full opportunity for a 30-month stay per ANDA or 505(b) 
application. Multiple 30-month stays increase the delay in approval of 
generic drugs and result in increased costs to consumers because the 
cost of individual drugs is reduced when generic drugs enter the 
marketplace and compete with the NDA drug.
    b. Should All Paragraph IV Certifications Be Made Public and Should 
the Notice Requirements Be Modified? The proposed rule would limit when 
a notice of a paragraph IV certification is provided to NDA holders and 
patent owners but did not address the content or format of the notice. 
The proposed rule did not address whether or not paragraph IV 
certifications were subject to public disclosure. We invited comment on 
whether our regulations regarding the notice by ANDA and 505(b)(2) 
applicants to the NDA holder and patent owner could and should be 
amended (67 FR 65454).
    (Comment 14) Several comments suggested that we should post all 
paragraph IV certifications on our Web site because, these comments 
argued, there is no basis to exempt the paragraph IV certifications 
from public disclosure. The comments also suggested that we disclose 
all paragraph IV certifications.
    (Response) We decline to amend the proposed rule to make public all 
paragraph IV certifications or otherwise provide notice of paragraph IV 
certifications to NDA holders and patent owners. Under current 
practice, paragraph IV certifications are subject to public disclosure 
under the Freedom of Information Act (FOIA) and FDA's public disclosure 
regulations once the notice of the paragraph IV certification has been 
provided to the NDA holder and patent owner. Because the notice to the 
NDA holder or patent owner of the paragraph IV certification is 
considered a public disclosure after notice has been given, the 
certification is available under FOIA. The final rule requires notice 
only for the first paragraph IV certification of an ANDA or 505(b)(2) 
application if that notice results in a full opportunity for a 30-month 
stay. Notice for a subsequent paragraph IV certification will be 
required only if the full opportunity did not result. Only the 
paragraph IV certifications for which notice is required will be 
routinely subject to public disclosure prior to approval. All other 
certifications in an application would be considered confidential, 
commercial information. Unless the ANDA or 505(b)(2) applicant makes 
the subsequent certification public on its own accord, we are 
prohibited from any disclosure that would reveal the applicant's 
identity, contents of the application, or the timing of the application 
(see Sec. Sec.  20.61(b) and 314.430). We do not believe that amending 
our FOIA regulations to permit the release of information typically 
considered confidential, commercial information, i.e. information that 
could cause competitive harm is appropriate, without deciding at this 
time that we could even do so.
    Although parties are free to make paragraph IV certifications 
public themselves, we will continue to adhere to our pre-existing FOIA 
and public disclosure requirements as applicable to paragraph IV 
certifications. We also intend to publish on our Internet Web site, for 
each drug, the number of paragraph IV certifications filed to patents 
submitted after the effective date of this final rule, if it can be 
done in a manner that is consistent with FOIA. To avoid any 
inappropriate public identification, we will not publish the number of 
subsequent paragraph IV certifications if there is only one ANDA or 
505(b)(2) application containing a paragraph IV certification because 
such publication would be tantamount to a public disclosure of that 
applicant's confidential, commercial information.
    The NDA holder and patent owner also have other means to determine 
whether subsequent paragraph IV certifications have been filed. If a 
lawsuit is filed after notice of the paragraph IV certification, the 
NDA holder or patent owner can use the litigation process to discover 
the ANDA or 505(b)(2) applicant's certifications to subsequent patents. 
Furthermore, additional public information is available if we issue a 
tentative approval letter to the ANDA or 505(b)(2) applicant with a 
paragraph IV certification. These letters are publicly available before 
the ANDA or 505(b)(2) applicant receives an approval and note the 
applicable patents, patent certifications, and exclusivities affecting 
the timing of the approval of the ANDA or 505(b)(2) application.
    We note that comments concerning public disclosure of paragraph IV 
certifications and the need for quick resolution of patent issues were 
submitted both by brand name or innovator firms and their trade 
associations and by generic drug firms or related interests. We believe 
such mutual interests will encourage the voluntary disclosure of 
paragraph IV certifications.
    (Comment 15) Several comments responded to our request for comments 
on whether our regulations concerning the certifications filed by ANDA 
and 505(b)(2) applicants and the notice to NDA holders and patent 
owners could or should be modified. Most comments agreed that we had 
the authority to modify both the certifications and the notice. One 
comment suggested that we ``clarify the elements of a proper paragraph 
IV notification'' to ``ensure that paragraph IV notifications 
communicate meaningful information regarding the basis for an assertion 
that a listed patent is invalid or not infringed'' and that 
``adequate'' information is provided. Another comment suggested that 
the notice provided to the NDA holder and patent owner of a paragraph 
IV certification should include an explanation of the relationship 
between the patent claims as construed by the ANDA or 505(b)(2) 
applicant and the drug product. Another comment said we should require 
the NDA holder and patent owner to identify an ``agent for service'' 
and require service by registered mail to ensure that the notice will 
reach its ``proper location within the corporation in a timely 
manner.''
    (Response) In reviewing the current notification requirements at 
Sec.  314.95(c), we do not believe that the suggested solutions for 
clarification or more detailed explanations would improve upon the 
current regulation. The current regulation requires specific 
information in a notice that explains in full, and in detail, the 
nature of the claim that the listed patent is invalid or, unenforceable 
or will not be infringed. Our regulations, at Sec. Sec.  314.52(a) and 
314.95(a), require notification by registered or certified mail, return 
receipt requested. Our regulations also require documentation of a 
receipt establishing that the notice was received by the listed NDA 
holder and patent owner (see Sec.  314.52(e) and Sec.  314.95(e)). A 
receipt other than a return receipt or a letter from the recipient 
acknowledging receipt can be provided only with advance FDA agreement.
    We do not believe it would be appropriate to further limit delivery 
of the notice, nor do we believe it is appropriate to require ``agents 
for service.'' We are not persuaded that such agents would solve the 
comment's problem that ``notice is not reaching its

[[Page 36691]]

proper location within the corporation in a timely manner.'' In 
addition, the individual listed as the ``agent for service'' could 
change, resulting in confusion and delay in providing notice.
    (Comment 16) Another comment suggested we require ANDA and 
505(b)(2) applicants to file a new complete application for every drug 
product listed separately in the Orange Book rather than allow 
applicants to file supplements to approved applications. This comment 
would require new applications for each drug strength listed in the 
Orange Book as a separate product.
    (Response) We decline to adopt the comment's suggestions. Our 
current policies regarding supplements to ANDA and 505(b)(2) 
applications allow for significant administrative efficiencies and 
reduced application review times. Requiring separate ANDA or 505(b)(2) 
applications would substantially increase costs for applicants, as well 
as the agency, to accommodate the burden of creating, submitting, 
processing, and reviewing multiple, complete applications. Our policy 
regarding supplemental ANDAs for multiple strengths of a drug has been 
a major factor in reducing ANDA review times. Before 1991 (when 
applicants had to submit separate ANDAs for different strengths of a 
drug), the median approval time for an ANDA was 33 months. Today it is 
approximately 18 months. A key purpose of this final rule is to help 
expedite the approval of generic products so that they can more quickly 
be introduced to the marketplace. If we adopted the suggestion, the 
probable effect would be to delay the introduction of generic drugs 
into the market because the review times would increase. Requiring 
multiple applications would not provide any additional value to our 
review of ANDA applications. Consequently, we decline to require 
separate applications as suggested by the comment.
    c. Should the Single 30-Month Stay Be Further Limited?
    (Comment 17) Many comments agreed with our determination that the 
delay in approval of ANDA or 505(b)(2) applications could be limited to 
one 30-month stay per application. Other comments agreed with the 
limitation but stated that the single 30-month limitation was or should 
be:
    [sbull] Per drug;
    [sbull] Per ANDA, for all patents submitted before any ANDA filing; 
or
    [sbull] Limited only to patents submitted within 30 days of NDA 
approval.
    (Response) We decline to adopt the additional limitations as 
suggested by the comments. The act requires a certification for each 
listed patent for each application filed under sections 505(b)(2) or 
505(j) of the act. We construe section 505(c)(2) of the act to require 
submission of patent information after NDA approval, without regard to 
when an ANDA or 505 (b)(2) application has been filed. We decline to 
limit the 30-month stay resulting from a paragraph IV certification to 
only those patents submitted before any ANDA or 505(b)(2) filing, or 
those filed only within 30 days of NDA approval, or per listed drug 
instead of per application.
    d. Will the Application of Only One 30-Month Stay Affect 
Declaratory Judgment Actions Under the Act?
    (Comment 18) Several comments supported the single 30-month stay 
but expressed concern that limiting the notice requirement and 30-month 
stays to the first paragraph IV certification could affect the ability 
of ANDA and 505(b)(2) applicants to file a declaratory judgment action 
to resolve patent infringement issues. Some comments believed that in 
the absence of both notice to the NDA holder and patent owner and the 
ensuing 45-day period within which a patent infringement suit could be 
initiated, a declaratory judgment action could not be brought. Other 
comments opposed the single 30-month stay and also expressed concern 
about the ability to pursue a declaratory judgment action under the 
proposal. Some comments questioned whether a declaratory judgment 
action could be filed under other statutory provisions; the comments 
explained that the Hatch-Waxman Amendments created the act of patent 
infringement and, if litigation were bought ``outside'' the act, there 
would be no ``case or controversy'' required by those provisions. One 
comment cited Cordis Corp. v. Medtronic, Inc., 835 F.2d 859, 862 (Fed. 
Cir. 1987), noting that ``when the generic cannot meet the subjective 
standard of proving a reasonable apprehension of a suit by the brand 
company,'' the case may be dismissed because there was no ``case or 
controversy.'' Another comment cited Teva Pharmaceuticals, USA, Inc. v. 
FDA, 182 F.3d 1003 (D.C. Cir. 1999), to claim that if no notification 
were received, arguably no declaratory action could be brought. Other 
comments suggested that limiting NDA holders to a single 30-month stay 
per ANDA or 505(b)(2) application would encourage the delay of 
litigation designed to resolve patent issues and thus would reduce 
``certainty'' for ANDA applicants.
    (Response) We appreciate the desire to resolve patent issues 
quickly, but believe the concerns expressed about the ability to pursue 
declaratory judgment actions are unwarranted. Section 505(j)(5)(B)(iii) 
of the act provides: ``Until the expiration of forty-five days from the 
date the notice made under paragraph (2)(B)(i) is received, no action 
may be brought under section 2201 of title 28, United States Code, for 
a declaratory judgment with respect to the patent.'' We interpret this 
particular section as creating an exception to the general right of a 
party to bring a declaratory judgment action at any time that 
jurisdictional requirements are satisfied under title 28, United States 
Code. The general rule allowing declaratory judgments under 28 U.S.C. 
2201 would be applicable as long as a party can satisfy the ``case or 
controversy'' requirement that is necessary to file a declaratory 
judgment action. The exception created in section 505(j) of the act 
restricts the timing when a declaratory judgment action may be filed 
under certain limited circumstances. Under the act, if notice of a 
paragraph IV certification is required, no declaratory judgment action 
can be filed until 45 days after that notice is given to the NDA holder 
and patent owner. However, if no notice is required to be provided to 
the NDA holder and patent owner, the exception created in section 
505(j) of the act no longer applies, and the general rule permitting 
declaratory judgments to be filed at any time under 28 U.S.C. 2201 
would apply.
    We also disagree with the conclusions drawn from the cases cited in 
the comments that, in the absence of the notice of subsequent paragraph 
IV certifications, there would be no case or controversy on which to 
base a declaratory judgment action. A case or controversy can exist 
where first, there is reasonable fear of a lawsuit and, second, the 
plaintiff has actually produced the product in question or is prepared 
to produce the product. (See Cordis Corp. v. Medtronic, Inc., 835 F.2d 
859 (Fed. Cir. 1987)). In Vanguard Research, Inc. v. PEAT, Inc., 304 
F.3d 1249, 1255 (Fed. Cir. 2002), the court found that fear of a 
lawsuit existed when the competitor was engaged in activity subject to 
a patent infringement charge, and the patent holder already had sued 
the competitor to protect its technology. The court noted that: 
``[f]iling a lawsuit for patent infringement would be just another 
logical step in its quest to protect its technology.'' This is similar 
to the

[[Page 36692]]

situation in which an ANDA or 505(b)(2) applicant has filed an initial 
paragraph IV certification and the NDA holder or patent owner has filed 
a lawsuit to protect the patent and obtain a 30-month stay. There is 
little reason to doubt that an NDA holder or patent owner who had 
submitted a second patent to us for listing would bring another lawsuit 
to protect the second patent if an ANDA or 505(b)(2) applicant were to 
manufacture the drug, even if no notice of a subsequent paragraph IV 
certification was provided. In other words, the NDA holder or patent 
owner should have an incentive to protect the patented invention 
regardless of whether the ANDA or 505(b)(2) applicant provided notice.
    We acknowledge that the court in Jervis B. Webb Co. v. Southern 
Systems, Inc., 742 F.2d 1388 (Fed. Cir. 1984), found that a case or 
controversy did not exist when the plaintiff had not produced a product 
(a device) at the time of the declaratory judgment counterclaim. 
However, an ANDA or 505(b)(2) applicant is engaged in ``producing'' a 
product at the time the ANDA or 505(b)(2) application is filed. 
Although 35 U.S.C. 271(e)(1) makes it an act of non-infringement to use 
a patented invention for uses related to submitting an ANDA or 
505(b)(2) application (such as testing and producing sample batches of 
drug product), 35 U.S.C. 271(e)(2) expressly makes it an act of 
infringement to submit an ANDA or 505(b)(2) application seeking 
approval of the drug product before a patent expires. This statutory 
provision does not require that the NDA holder or patent owner receive 
formal notice of a paragraph IV certification for the submission of the 
application to be an act of infringement. Thus, unlike the plaintiff in 
Jervis B. Webb Co. v. Southern Systems, Inc., the second element of the 
case or controversy test would be satisfied.
    In another case cited in the comments, Teva Pharmaceuticals, USA, 
Inc. v. FDA, 182 F.3d 1003 (D.C. Cir. 1999), the court explained that a 
case or controversy did not exist in the underlying declaratory 
judgment action. There was no reasonable apprehension of suit--the 
first element of the case or controversy test--because the patent owner 
had disavowed an intent to sue. A disavowal of the intent to sue is an 
unusual circumstance that we do not expect to occur in many cases. In 
any event, the availability of a declaratory judgment action is less 
important when the innovator or patent owner disavows an intent to sue 
because the ANDA applicant will face less risk in marketing its 
competing product. We are not aware of any other Hatch-Waxman patent 
infringement case in which a court has found no reasonable apprehension 
of suit.
    In response to the comments arguing that a single 30-month stay 
would create uncertainty regarding litigation and later-submitted 
patents, we note that a firm's inability to predict whether it will or 
will not be sued for patent infringement is a matter outside the scope 
of this final rule. A decision by the NDA holder or patent owner on 
whether to file suit for patent infringement may depend on many 
factors. For example, litigation decisions could be affected by the 
strength of the underlying patent, the party's resources, licensing 
agreements if the patented invention is made under a license, or other 
factors. We also note that some patent infringement suits may be 
initiated after the 45 day period available to obtain a 30-month stay 
has expired. The act only requires the initiation of a patent 
infringement suit within a specific time if the NDA holder or patent 
owner wishes to get the benefit of a 30-month stay in the approval of 
an ANDA or 505(b)(2) application; the NDA holder or patent owner can 
bring suit at a later time, but loses the opportunity to obtain a 30-
month stay of approval.
    In addition, there are various types of patents which must not be 
submitted for listing in the Orange Book. These patents are not subject 
to the certification, notice, and 30-month stay provisions. The fact 
that such patents must not be listed does not prevent the NDA holder or 
patent owner from defending those patents in litigation as it deems 
appropriate.
    e. Is the Correct Legal Interpretation Applied to Provide Only One 
30-Month Stay?
    (Comment 19) Numerous comments challenged our proposed 
interpretation of the act to permit only one 30-month stay per ANDA or 
505(b)(2) application. Some comments advanced a legal analysis 
different than the one we described in the preamble to the proposal to 
support a single 30-month stay. The comments asserted that their legal 
theories were either better than ours or were the only appropriate 
legal arguments possible.
    In contrast, other comments maintained that section 
505(j)(2)(B)(iii) of the act requires that notice be provided to the 
NDA holder and patent owner each time a new paragraph IV certification 
is added to an ANDA. These comments maintained that multiple 30-month 
stays are clearly required if the notices result in patent litigation. 
Several comments contended that the plain meaning of ``include'' or 
``amended to include'' is to ``contain'' or ``comprise as part of a 
whole,'' and that our interpretation of section 505(j)(2)(B)(iii) of 
the act is not reasonable. The comments also argued that our 
interpretation of ``include'' in this provision differs from its use 
elsewhere in section 505 of the act. One comment stated that the 
meaning of ``include'' in sections 505(j)(7)(A)(ii) and (iii) of the 
act cannot be reconciled with our interpretation of that term in 
section 505(j)(2)(B)(iii) of the act. Section 505(j)(2)(B)(iii) of the 
act states that ``If an application is amended to include a 
certification described in subparagraph (A)(vii)(IV), the notice 
required by clause (ii) shall be given when the amended application is 
submitted.'' The comment noted that section 505(j)(7)(A)(ii) of the act 
provides that the Secretary ``shall revise the list [Orange Book] to 
include each drug which has been approved . . . during the 
[intervening] thirty-day period'' and, when that updated drug 
information is recorded ``in revisions made under clause (ii), [shall] 
include such [patent] information for such drug.''
    Several comments questioned whether the legislative history of the 
Hatch-Waxman Amendments supported our proposed interpretation of 
section 505(j)(2)(B)(iii) of the act. One comment contended that House 
Report language (see 67 FR 65448 at 65456) we had cited should be read 
as supporting multiple 30-month stays. The comments also argued that 
our interpretation failed to consider the importance of the final 
compromise that led to a 30-month, rather than 18-month, stay to ensure 
that patent litigation was resolved before a generic drug was approved. 
Finally, other comments criticized our failure to consider other 
language from a House Report that allegedly shows that Congress 
intended the availability of multiple 30-month stays. This language, 
found at H. Rept. 98-857, Part 1, 98th Cong., 2d Sess. at 28, states: 
``In the case where the patent certification is amended in an ANDA to 
allege invalidity or non-infringement of a patent, the FDA may not make 
the approval effective within the 45 day period that an action for 
patent infringement may be brought.''
    (Response) We agree that section 505(j)(2)(B)(iii) of the act can 
be read to permit multiple 30-month stays. Indeed, this has been our 
position since the enactment of the Hatch-Waxman Amendments. The 
proposal put forth a different interpretation, one that we believe is 
equally reasonable and more in line with the intent of the Hatch-

[[Page 36693]]

Waxman Amendments--to maintain a balance between the rights of the NDA 
holders and patent owners, and the desire to have more rapid 
availability of generic drugs. Our revised interpretation of section 
505(j)(2)(B)(iii) of the act accomplishes two statutory objectives: (1) 
It closes a possible loophole that would have allowed ANDA applicants 
to avoid any 30-month stay and (2) it prevents multiple 30-month stays 
per ANDA application. A similar conclusion applies to the parallel 
provisions of section 505(b)(2) of the act.
    We based our change in position on a reevaluation of the statutory 
text and concluded that the act is ambiguous on this issue of multiple 
30-month stays. We note that certain other legal interpretations or 
theories may support a single 30-month stay, but we believe that the 
position we have taken in the final rule is the most appropriate.
    The preamble to the proposed rule explained the rationale for our 
different interpretation (see 67 FR 65448 at 65454 to 65456). In brief, 
after reviewing the text of section 505(j)(2)(B)(i) through (iii) of 
the act, we believe that these provisions may be reasonably interpreted 
so that notice and the opportunity for a 30-month stay do not flow from 
all paragraph IV certifications. However, one notice of a paragraph IV 
certification and one full opportunity for a 30-month stay will always 
be required. This outcome--the opportunity for one 30-month stay during 
which patent rights can be litigated, but no multiple 30-month stays 
per ANDA or 505(b)(2) application to unreasonably delay approvals of 
competitor drugs--is a reasonable and balanced interpretation of the 
act.
    We disagree with the comments that claimed that notice and 30-month 
stays are required only for paragraph IV certifications contained in 
original ANDAs because the notice provision at section 505(j)(2)(B)(ii) 
references only section 505(j)(2)(B)(i) of the act. This interpretation 
would eliminate the opportunity for a 30-month stay in any situation 
where an ANDA applicant waits until an amendment to submit a paragraph 
IV certification. As we explained in the proposed rule (see 67 FR 65448 
at 65455 to 65456), section 505(j)(2)(B)(iii) of the act specifically 
requires ANDA applicants to give notice if they amend their 
applications to include their first paragraph IV certification. For 
these reasons, we do not interpret the act to require that only 
paragraph IV certifications contained in original ANDA applications 
will trigger the notice requirements and the possibility of a 30-month 
stay.
    Our interpretation ensures that the NDA holder and patent owner 
will receive notice of at least one paragraph IV certification and have 
one full opportunity for a 30-month stay. However, we also disagree 
that every paragraph IV certification requires notice and an 
opportunity for a 30-month stay. We will require notice to the NDA 
holder and patent owner of a later paragraph IV certification if: (1) 
The ANDA or 505(b)(2) application did not previously contain a 
paragraph IV certification, but is amended to include a paragraph IV 
certification; or (2) a previous notice of a paragraph IV certification 
did not result in one full opportunity for the 30-month stay under the 
act.
    This approach is consistent with the statutory language. By its 
terms, section 505(j)(2)(B)(i) of the act, and the nearly identical 
language applicable to 505(b)(2) applicants, requires that the ANDA 
applicant submitting a paragraph IV certification in its original ANDA 
``include in the application'' that it will provide the required 
notice. Section 505(j)(2)(B)(ii) of the act sets forth the required 
content of the notice referred to in clause (i). Under section 
505(j)(5)(B)(iii) of the act, we are prohibited from approving an 
application with a paragraph IV certification if an action has been 
brought within 45 days of the date the notice under section 
505(j)(2)(B)(i) is received. The text of section 505(j)(5)(B)(iii) 
refers multiple times to ``the notice provided [or made] under 
paragraph (2)(B)(i).'' Thus, at a minimum, it cannot be said the 
statute clearly applies the notice requirement to all paragraph IV 
certifications, whether in original or amended ANDAs.
    By contrast, section 505(j)(2)(B)(iii) of the act refers to 
amended, not original, ANDAs. It addresses the question of notice when 
an ANDA is amended to include a paragraph IV certification. Our 
interpretation eliminates the possibility that an ANDA applicant could 
evade any notice that could lead to a 30-month stay by omitting any 
paragraph IV certification in an original ANDA, and then later amending 
the application to include such a certification. By providing one full 
opportunity for the 30-month stay, we reduce the opportunity for 
intentional manipulation of the filing of paragraph IV certifications.
    We do not agree that the act's language governing the operation of 
paragraph IV certifications, notice, and 30-month stays is clear and 
unambiguous. As the multiple interpretations advanced by the comments 
demonstrate, the statutory language may plausibly be read in different 
ways. It is certainly reasonable to interpret ``include'' as used in 
the act to mean ``contain.'' That is the meaning we understood the word 
to have when we issued the proposed rule (see 67 FR 65448 at 65455). 
Thus, it is a reasonable construction of the act to conclude that when 
an application is amended to contain a paragraph IV certification (when 
it did not previously contain such a certification), it is thus amended 
to include such a certification; and, that once an application contains 
such a certification, adding a new one does not amend or change the 
application to include or contain one, since it already contained such 
a certification. In any event, reliance on words in isolation is 
misplaced. As Judge Learned Hand observed, ``Words are not pebbles in 
alien juxtaposition; they have only a communal existence; and not only 
does the meaning of each interpenetrate the other, but all in their 
aggregate take their purport from the setting in which they are used * 
* *.'' NLRB v. Federbush Co., 121 F.2d 954, 957 (2d Cir. 1941). Our 
interpretation of the 30-month stay provision is fully consistent with 
this principle.
    We also reject the view that our interpretation of the statutory 
language ``amended to include'' is inconsistent with the use of the 
word ``include'' elsewhere in the statute. We do not agree that the use 
of ``include'' in section 505(j)(7)(A)(ii) and (j)(7)(A)(iii) of the 
act cannot be squared with our interpretation of that term in section 
505(j)(2)(B)(iii) of the act. Sections 505(j)(7)(A)(ii) and 
(j)(7)(A)(iii) of the act, which relate to updating the Orange Book 
every 30 days to take into account drug approvals and patent listings, 
provide that the Secretary ``shall revise the list to include each drug 
which has been approved * * * during the [intervening] thirty-day 
period'' and when that updated drug information is recorded, ``in 
revisions made under clause (ii), [shall] include such [patent] 
information for such drug.'' That language requires publication of 
revisions to include something that was not previously contained in the 
Orange Book, i.e., approved drugs and patents that were not listed in 
the version of the Orange Book that existed immediately before the 
amendments were filed. The Secretary would publish nothing, under this 
statutory directive, if in the preceding 30 days, no new drugs were 
approved or patent listings filed. Similarly, when an ANDA or 505(b)(2) 
application is amended to include a paragraph IV certification, when no 
such certification is contained in the

[[Page 36694]]

application prior to the amendment of the application, section 
505(j)(2)(B)(iii) of the act applies. But when an ANDA or 505(b)(2) 
application contained a paragraph IV certification prior to the 
amendment and one full opportunity arose for a 30-month stay, no notice 
obligation is triggered for subsequent paragraph IV certifications.
    We do not agree with the comment that the legislative history 
indicates that Congress changed the 18-month stay to a 30-month stay 
because it intended that patent litigation be resolved before a generic 
application could be approved. The House Judiciary Committee rejected 
an ``amendment [that] would have required that either the patent expire 
before approval, or that there be a final decision by a Federal 
District Court that the patent in question was not valid'' (see H. 
Rept. 98-857, Part 2, 98th Cong. 2d Sess., 9 (1984)). It appears that 
the amendment was rejected because the effect ``would have been to 
substantially delay generics from getting onto the market when they 
seek to challenge the validity of a patent'' (id. at 10). Congress 
explicitly rejected amendments to prohibit generic entry before 
judicial resolution of the patent issues prior to approval, but 
accepted a 30-month stay period, whether or not litigation was finally 
resolved, because, as a practical matter, it was believed the time 
period would not affect when generic manufacturers would begin to 
market their drugs (see 130 Congressional Record H9118 (September 6, 
1984) (remarks of Rep. Waxman)).
    We also believe that the legislative history quoted in the comments 
is ambiguous at most and can be interpreted in a way that does not 
undercut our changed interpretation. The report states: ``In the case 
where the patent certification is amended in an ANDA to allege 
invalidity or non-infringement of a patent, the FDA may not make the 
approval effective within the 45 day period that an action for patent 
infringement may be brought.'' Although this language does not 
distinguish explicitly between situations when an application already 
contained a paragraph IV certification and those when it did not, it 
would not be unreasonable to interpret it to apply only when invalidity 
or non-infringement of a patent is alleged for the first time. Language 
describing when an ANDA is ``amended * * * to allege invalidity or non-
infringement of a patent'' can be read in another way as ``amended to 
include'' a paragraph IV certification. When an ANDA or 505(b)(2) 
application is amended to include an allegation of invalidity or non-
infringement of a listed patent for the first time, we cannot approve 
the application for 45 days, and notification of the paragraph IV 
certification will be required. For additional paragraph IV 
certifications, when a patent has already resulted in a paragraph IV 
certification and a full opportunity for a 30-month stay, no notice is 
required and we do not need to wait for 45 days to approve an ANDA or 
505(b)(2) application if it is otherwise ready for approval.
    f. Is There a Sufficient Basis to Adopt the Change in Legal 
Interpretation? In the preamble to the proposed rule, we detailed the 
factual basis for our decision to reevaluate our legal interpretation 
of the maximum number of 30-month stays per ANDA or 505(b)(2) 
application (see 67 FR 65448 at 65455). We noted that our impression 
that multiple 30-month stays were increasing was confirmed by the FTC 
Report. In addition, the FTC Report found that there was an increase in 
submission of later-issued patents, many of which ``do not appear to 
claim the approved drug product or an approved use of the drug'' (id.).
    (Comment 20) Several comments questioned the factual basis for what 
they called our ``dramatic change in position'' and argued that the 
information used in the FTC Report was already known to us. Since there 
was no ``new information,'' the comments maintained that the facts did 
not provide an ``adequate'' basis for our adoption of a single 30-month 
stay per ANDA or 505(b)(2) application.
    (Response) We disagree with the contention that our factual basis 
underlying our rule was inadequate. At the outset, we note that the 
comments proceed from a false premise to a flawed conclusion. The 
``newness'' of the underlying data is not the appropriate legal 
standard for evaluating the reasonableness of our different 
interpretation. An agency must consider ``the wisdom of its policy on a 
continuing basis'' ``with or without a change in circumstances'' (see 
Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 
U.S. 837, 863, 104 S. Ct. 2778, 2792 (1984); Motor Vehicle 
Manufacturers Ass'n v. State Farm Mut. Automobile Ins. Co., 463 U.S. 
29, 57, 103 S. Ct. 2856, 2873 (1983)). Our pre-existing regulations 
permitting multiple 30-month stays have led to protracted delays in 
generic drug approvals and, therefore, need to be changed.
    If ``newness'' of the underlying data were the test, the data here 
would satisfy it. Over the last several years, there has been an 
increasing number of multiple 30-month stays for a single drug product. 
These stays have caused significant delays in the approval of generic 
versions of frequently prescribed drugs. We anticipate that if we do 
not address the current situation, these multiple 30-month stays and 
resulting delays in generic drug approvals would continue to increase. 
There will be an increasing number of patents expiring in the next few 
years covering innovator drugs currently on the market. According to 
our records, over 500 drug patents will expire between 2003 and 2009. 
We have identified 26 top-selling drugs subject to patents with 
expiration dates between 2003 and 2005. These 26 drugs had combined 
2001 retail sales exceeding $38 billion (over 25 percent of all 2001 
prescription drug expenditures) and include 7 of the top 10 best 
selling drugs. The pressure on NDA holders and innovator companies to 
protect their market share and delay generic competition into the 
market will continue to increase. We would expect to see an increase in 
the conduct documented in FTC Report if our regulations remained the 
same.
    The FTC's comprehensive and discerning analyses of the data it 
collected substantiated the seriousness of the problem. The FTC 
analyzed the relationship between patent listings and multiple 30-month 
stays, conducted an extensive review of various lawsuits involving 
multiple 30-month stays (including lawsuits in which we were not a 
party) and analyzed the outcome of the litigation. Although we provided 
some raw data to the FTC to assist its investigations (and thus that 
information was not ``new'' to us), we did not have all of the data 
that the FTC collected nor had we analyzed the data in the manner done 
by the FTC.
    We have concluded that our regulations permitting multiple 30-month 
stays have led to considerable delays in the approval of generic drugs. 
This consequence was not intended either by Congress or by FDA. Thus, 
we have changed our regulations to address this problem.

B. Miscellaneous Comments

1. Do We Need Legislation to Accomplish Our Goals?
    The preamble to the proposed rule did not discuss any legislative 
efforts to enhance the availability of generic drugs.
    (Comment 21) Several comments said that legislation would be better 
than rulemaking or that we should support legislation. In general, the 
comments felt that legislation would:
    [sbull] Better resolve intellectual property issues than our rule;

[[Page 36695]]

    [sbull] Give us clear legal authority to act or be less vulnerable 
to judicial review; or,
    [sbull] Result in timely and predictable access to generic drugs.
    One comment noted that Congress had considered several bills to 
address 30-month stays. The comment declared that such proposed 
legislative action indicated both that we lacked authority to issue the 
rule and that new legislation was needed. Another comment suggested 
that we support legislation to allow only one 30-month stay and only 
for patents that are listed within 30 days of an NDA's initial 
approval.
    (Response) We believe that, under our existing regulations, there 
have been delays in generic drugs reaching the market, as well as 
confusion over certain patent listing requirements. This rule is 
intended to help ensure that lower cost, safe and effective generic 
drugs become available to Americans without any inappropriate delays, 
while still preserving incentives to innovate. These changes can be 
achieved through rulemaking, using our existing legal authority. We 
cannot predict whether, if at all, legislation addressing these issues 
will be enacted. The possibility that there could be legislation to 
address problems associated with 30-month stays and generic drug 
approvals cannot, and should not, preclude us from using our existing 
authority to address these problems. We also note that those comments 
favoring legislative solutions over regulatory ones apparently assume 
that legislative changes would necessarily lead to less litigation than 
a rule. Based on our past experience in defending statutory 
interpretations, we question whether such a presumption is appropriate 
here. We recognize that a regulation may not always be a perfect 
solution due to limits on our statutory authority, but that recognition 
does not mean that we cannot use our existing legal authority to engage 
in rulemaking to improve our regulatory approach.
    Additionally, we disagree with the comments that claimed we lack 
authority to issue the rule. The preamble to the proposed rule 
discussed our legal authority (see 67 FR 65448 at 65457). We will not 
repeat that discussion here. The fact that Congress has considered, or 
is currently considering, bills on the 30-month stay issue does not 
preclude us from exercising our existing authority, nor demonstrate 
that we presently lack that authority. As the Supreme Court has 
explained:
    We have stated * * * that failed legislative proposals are a 
particularly dangerous ground on which to rest an interpretation of 
a prior statute. Congressional inaction lacks persuasive 
significance because several equally tenable inferences may be drawn 
from such inaction, including the inference that existing 
legislation already incorporated the offered change.
(See Central Bank of Denver v. First Interstate Bank of Denver, 511 
U.S. 164, 187 (1994).)
(Citations and internal quotation marks omitted.)
    Although it would be both inappropriate and premature for us to 
take a position on any legislative concept without seeing the details 
of any specific proposed or draft legislation, we are always willing to 
work with Congress. Until then, we will not take a position on 
legislation to allow only one 30-month stay for patents filed within 30 
days after NDA approval.
2. Will the Different Interpretation Affect Existing Exclusivities?
    We stated in the preamble to the proposed rule that the 
implementation of the final rule would not affect an ANDA's eligibility 
for 180-day exclusivity under 505(j)(5)(B)(iv) of the act (see 67 FR 
65448 at 65457).
    (Comment 22) Several comments addressed different aspects of the 
180-day and 3 year exclusivity provisions of the Hatch-Waxman 
Amendments. The comments offered suggestions on changing the 
exclusivity trigger, requiring the forfeit of the exclusivity if 
parties agree to delay marketing and expressed concerns about the 
potential increase in the availability of 180-day exclusivity if we 
allow additional patents to be filed.
    (Response) We appreciate the complexities of the various 
exclusivities provided by the act. As we noted in the proposed rule, 
eligibility for 180-day exclusivity will follow the same general 
principles as before implementation of this final rule. The first ANDA 
applicant to file a substantially complete ANDA, or supplement, 
containing a paragraph IV certification to a listed patent will be 
eligible for exclusivity as to that patent under section 
505(j)(5)(B)(iv) of the act. For a paragraph IV certification to be 
effective for exclusivity purposes, when notice is required, notice 
must be given as described in the response to comment 13 of section 
II.A of this document. However, when notice is not required, a 
paragraph IV certification will be effective for exclusivity purposes 
without notice. We understand that each patent listed in the Orange 
Book may form the basis for a claim to 180-day exclusivity. Thus an 
increase or decrease in listed patents as a result of this final rule 
could affect the number of exclusivity periods. Other suggestions made 
in the comments are beyond the scope of the final rule. We are not 
altering our interpretation of exclusivity in the final rule.
3. Should the Provisions of the Final Rule Be Severable?
    The proposed rule did not address whether each provision should be 
considered independent of other provisions and, thus, severable if any 
provision were determined to be invalid.
    (Comment 23) Although there were no comments that directly 
addressed severability, one comment suggested that the limitation on 
multiple 30-months stays was unnecessary because the revised patent 
listing provisions would prevent improper patents from being submitted 
for listing in the Orange Book.
    (Response) Although we agree that the changes to the patent 
submission and listing provisions and the information required on the 
declaration forms will help ensure that improper patents are not 
submitted for listing, we also believe that eliminating multiple 30-
month stays will help maintain the balance intended by the Hatch-Waxman 
Amendments and is equally important to the final rule. Each of the 
final rule provisions reinforces interrelated goals. Clarifying that 
certain patents may not be submitted for listing should lead to the 
submission of fewer improper patents. Requiring additional patent 
declaration information from NDA applicants or holders or patent owners 
also should help ensure that only eligible patents are submitted. 
Eliminating the opportunity for multiple 30-month stays also should 
reduce incentives to submit improper patents.
    Based on our past experience we acknowledge that the provisions of 
this final rule will neither completely resolve all issues governing 
patent submission, nor will they eliminate attempts to manipulate the 
final rule for market advantage. We also believe that each provision 
will reduce the opportunities for manipulation and, thus, is 
independently justified and worthwhile. However, we believe each 
provision stands on its own as a legal and practical matter.
    From the comments we have received to the proposed rule, we believe 
there is a possibility that we will be challenged on various portions 
of the final rule. We expect we will prevail in any such challenge, as 
the final rule and each of its provisions is legally sound. If, 
however, a court should conclude that any one or more provisions of the 
final

[[Page 36696]]

rule is invalid, we wish to emphasize our intent that the remaining 
provisions of the final rule be permitted to take effect.
4. Implementation and Effective Date
    The preamble to the proposed rule described how a final rule would 
be applied to pending applications (see 67 FR 65448 at 65457) as 
follows:
    [sbull] For patents filed for an NDA that has not been approved by 
the effective date of a final rule, the rule would apply on the 
effective date. For example, if the final rule were to become effective 
60 days after the date of publication in the Federal Register, and an 
NDA was pending on the 60th day after the final rule's publication 
date, the NDA applicant would have to comply with the final rule's 
patent listing and patent declaration requirements. ANDA and 505(b)(2) 
application applicants would be subject to the revised notice 
requirement. Each ANDA or 505(b)(2) application referencing that NDA 
would be subject to the possibility of only one 30-month stay per ANDA 
or 505(b)(2) application.
    [sbull] If we have approved the NDA as of the final rule's 
effective date, and no ANDA has been filed before that date, then any 
patent listed before that date would be subject to the pre-existing 
regulation. For example, if the final rule were to become effective 60 
days after the date of publication in the Federal Register, and we 
approved the NDA on the 59th day after the date of publication, the NDA 
applicant would not have to amend its patent listing and patent 
declaration to comply with the final rule. ANDA and 505(b)(2) 
applications submitted after the effective date would be subject to the 
revised notice requirement. Each ANDA or 505(b)(2) application 
referencing that NDA would be subject to the possibility of only one 
30-month stay per ANDA or 505(b)(2) application.
    [sbull] If we have approved the NDA as of the final rule's 
effective date, and an ANDA or 505(b)(2) application has been filed 
before that date, then any patent listed before that date would be 
subject to the pre-existing regulations, as described in the example 
immediately above. The ANDA or 505(b)(2) application applicant would 
have to provide notice to the patent owner and NDA holder if the ANDA 
or 505(b)(2) application contained a paragraph IV certification. 
Multiple 30-month stays in the approval date would be possible.
    [sbull] If the NDA holder or NDA applicant files patent information 
after the final rule's effective date, then the NDA holder or applicant 
is subject to the final rule's patent listing and patent declaration 
requirements, and ANDA or 505(b)(2) application applicants would not 
have to provide notice if their applications previously contained a 
paragraph IV certification. Only one 30-month stay per each ANDA's or 
505(b)(2) application's approval date would be possible.
We invited comment on how a final rule should be implemented.
    (Comment 24) Several comments suggested alternative effective dates 
including the following:
    [sbull] Apply the final rule to all ANDAs filed before the 
effective date of the final rule and cancel any existing multiple 30-
month stays;
    [sbull] Apply the final rule retroactively to all current NDA 
holders by requiring all NDA holders to be subject to only one 30-month 
stay and apply the declaration provisions to require all current NDA 
holders or patent owners to file a new declaration and certification 
for already listed patents using the declaration statement in the 
proposal;
    [sbull] Apply the new declaration requirements retroactively to 
require the new information on patents currently listed in the Orange 
Book; if the propriety of a patent listed in Orange Book for a current 
NDA holder or patent owner is questioned, the NDA holder or patent 
owner must file a new declaration or FDA should delist the patent.
In contrast, other comments supported the implementation plan as 
proposed.
    (Response) We will implement the final rule on a prospective basis, 
as we stated in the proposed rule. The fact that we made our intent 
public in a proposed rule and the time lag between when the rule was 
proposed and when this final rule is effective provides sufficient time 
for most parties to adjust their practices and expectations, or to take 
other steps to suit their business practices.
    We do delay the implementation date for submission of information 
concerning a patent claiming a polymorph that is the active ingredient 
of the drug product described in the approved NDA. We provide a longer 
period of implementation to accommodate the tests required to establish 
that the drug product containing the polymorph will perform the same as 
the drug product described in the NDA. This test data must exist when a 
polymorph patent is submitted to us. We recognize that the testing 
necessary to obtain the data for submission of polymorph patents 
claiming the active ingredient of the product described in the NDA may 
take at least 6 months to complete. There will be NDA applicants and 
holders and patent owners who have not already conducted testing. The 6 
months will provide time for NDA applicants and holders and patent 
owners with patents pending at the PTO to conduct the tests needed to 
produce the data required for the declaration statement in time to 
submit any newly issued patent within 30 days of issuance.
    We also decline to apply the final rule retroactively. If we 
canceled all multiple 30-month stays currently applicable to ANDAs and 
505(b)(2) applications or applied the declaration requirements to 
already submitted patents for existing NDAs, we would be applying the 
provisions retroactively. As we noted in the proposal (67 FR 65448 at 
65457): ``If we were to adopt an alternative implementation plan, we 
would risk upsetting legitimate expectations held by those who had 
relied on our earlier interpretation of the act.'' As a general matter, 
a statutory grant of legislative rulemaking does not encompass the 
power to implement such regulations on a retroactive basis in the 
absence of express language granting such power (see Bowen v. 
Georgetown University Hospital, 488 U.S. 204, 208-09 (1988)). There is 
no question that this rule ``changes the legal landscape'' (see 
National Mining Ass'n v. Department of Labor, 292 F.3d 849, 858 (D.C. 
Cir. 2002)). Applying this rule retroactively would subject us to 
potential legal challenge. Thus, adopting these suggestions would lead 
to even greater uncertainty as to the applicability of the provisions.
    After further consideration, however, we believe that the proposed 
rule's implementation plan will not fully effect our intent to 
implement the provisions only prospectively. Accordingly, as described 
in section IV of this document, we have clarified our implementation 
plan to ensure prospective application of the final rule. Nevertheless, 
patent owners may voluntarily complete, and NDA holders may voluntarily 
complete and submit, new patent declarations, using FDA Forms 3542 and 
3542a, for patents not subject to the final rule and currently listed 
in the Orange Book. This course is particularly advisable for method-
of-use patents, in light of the Purepac decision and concerns about 
implementation of section 505(j)(2)(A)(viii) of the act. Such voluntary 
submission of new patent declarations will not bring patents within the 
scope of the final rule with respect to notice and 30-month stays.

[[Page 36697]]

III. Description of the Final Rule

A. Section 314.53(b)--What Patents Must Be Submitted?

1. Which Patents Would the Final Rule Require To Be Submitted?
    Section 314.53(b) describes the patents for which information must 
be submitted. The final rule states, in relevant part, that information 
must be submitted on the required declaration forms for each patent 
that claims the drug or a method of using the drug that is the subject 
of the NDA and with respect to which a claim of patent infringement 
could reasonably be asserted if a person not licensed by the owner of 
the patent engaged in the manufacture, use, or sale of the drug 
product. The patents include patents that claim:
    [sbull] The drug substance (active ingredient),
    [sbull] The drug product (formulation and composition), and
    [sbull] A method of use.
    Those patents that claim a different polymorphic form of the drug 
substance that is the active ingredient described in the NDA must be 
submitted if the applicant has test data demonstrating that a drug 
product containing the polymorph will perform the same as the drug 
product described in the NDA. The drug product (formulation and 
composition) patents submitted must claim the specific drug product 
described in the pending or approved NDA. For patents that claim a 
method of use, the NDA applicant or holder must submit only those 
patents that claim indications or other conditions of use that are the 
subject of a pending or approved application. Each pending or approved 
method of use and related patent claim must be described.
2. What Patents Must Not Be Submitted?
    Section 314.53(b), as finalized, states that information on patents 
claiming packaging, patents claiming metabolites, and patents claiming 
intermediates must not be submitted. Process patents also must not be 
submitted. The final rule clarifies that the prohibition on submission 
of packaging patents does not apply to patents that claim the drug 
product as defined in Sec.  314.3. If a patent claims the finished 
dosage form of the drug product, it must be submitted for listing.

B. Section 314.53(c)--What Does the Patent Declaration Say?

    Section 314.53(c)(1) describes the general requirements for 
submission of patent information and the conditions for acceptance of 
the patent information. Section 314.53(c)(2)(i) requires a person 
submitting an NDA, an amendment, or a supplement, to submit an original 
signed declaration form as part of its submission of patent 
information. The appropriate declaration form must be used for 
submitting patent information. The information required to be submitted 
is described. Each form seeks specific patent information and requires 
a signed attestation from the NDA applicant or holder or patent owner 
that the information is accurate and complies with the requirements of 
the regulations.
    Section 314.53(c)(2)(ii) requires that the NDA holder submit a 
declaration form with information relating to the approved NDA and 
additional information on use codes within 30 days of NDA approval. The 
information required to be submitted is described. Each form includes 
specific patent information and requires a signed attestation from the 
NDA holder or patent owner that the information is accurate and 
complies with the requirements of the regulations. This section also 
requires submission of information on patents submitted for listing 
after NDA approval. This declaration form is the only declaration form 
that we will rely on to determine whether a patent is eligible for 
listing based on the patent information submitted.

C. Section 314.53(c)(3)--What Is Required to Be Filed If There Are No 
Relevant Patents?

    The final rule modifies the statement used to describe the fact 
that the NDA applicant or holder believes there are no relevant patents 
to be submitted. The language is changed to conform to the descriptions 
used for drug substance (active ingredient), drug product (formulation 
and composition) and method of use to those used in the other 
regulatory provisions.

D. Sections 314.95(a) and 314.52(a)--When Are Notice and Certification 
Required?

    The final rule modifies Sec. Sec.  314.95(a) and 314.52(a) to state 
that, if an ANDA or 505(b)(2) application is amended to include a 
paragraph IV certification, notice must be provided to the NDA holder 
and patent owner only if the application did not already contain a 
paragraph IV certification or there was not a full opportunity for a 
30-month stay. If an ANDA or 505(b)(2) applicant changes its paragraph 
IV certification before the 45-day period after notice to the NDA 
holder and patent owner has expired, and the NDA holder or patent owner 
has not initiated patent litigation, such paragraph IV certification 
and related notice are not considered to have satisfied the requirement 
of providing one notice of a paragraph IV certification and a full 
opportunity for a 30-month stay.

IV. Implementation

    The final rule will be effective on August 18, 2003.
    [sbull] Patent information submitted to us (FDA) before the 
effective date will be subject to our pre-existing regulations 
governing patent submission, declarations, certifications, notice and 
availability of 30-month stays;
    [sbull] Patent information submitted to us on or after the 
effective date will be subject to the final rule's provisions governing 
patent submission, accompanying declarations, certifications, notice 
and availability of 30-month stays;
    [sbull] Patent information submitted to us on a newly applicable 
claim, even if the patent was previously submitted to us, will be 
subject to the final rule's provisions.
    The final rule will have a compliance date of December 18, 2003, 
for patent information submitted to us on patents claiming a polymorph 
of the same active ingredient of the product described in the NDA.
    As a result, within a single same approved or pending NDA, some 
patents may be subject to our pre-existing regulations while other 
patents may be subject to the final rule. The date on which the patent 
information was submitted to us will determine which set of regulations 
applies.
    We believe that the effective dates will provide adequate time for 
the NDA applicants, NDA holders, and patent owners to adjust their 
business practices. The patent information required for submission is 
information readily available to the NDA applicants and holders and 
patent owners.
    We have delayed the implementation date for patent information to 
be submitted to us on patents claiming a polymorph that is the active 
ingredient of the drug product described in the approved NDA. NDA 
applicants and holders and patent owners with patents pending at the 
PTO will have additional time (i.e., until 6 months after the date of 
publication in the Federal Register) to conduct the tests needed to 
produce the data required for the declaration statement in time to 
submit any newly issued patent within 30 days of issuance.

V. Legal Authority

    Our principal legal authority for the final rule is section 505 of 
the act, in

[[Page 36698]]

conjunction with our general rulemaking authority in section 701(a) (21 
U.S.C. 371) of the act. Section 505(b) and (c) of the act describes the 
contents of an NDA and 505(b)(2) application, including the patent 
submission and patent certification requirements. Section 505(j) of the 
act describes the contents of an ANDA, including patent certification 
requirements. Sections 505(b)(2)(A) and 505(j)(2)(A)(vii) of the act, 
respectively, require patent certifications, while sections 505(b)(3) 
and 505(j)(2)(B) of the act require those applicants who have made a 
paragraph IV certification to provide notice to the NDA holder and 
patent owner.
    The final rule clarifies the types of patents which NDA applicants 
and NDA holders must and must not submit to FDA for listing in the 
Orange Book. It also requires a more detailed patent declaration from 
NDA applicants and NDA holders or patent owners using declaration 
forms. The specific legal authority for each provision is set forth in 
the preamble discussion accompanying it.
    For ANDA and 505(b)(2) applicants, the final rule reduces the 
number of notifications sent to patent owners and NDA holders. The 
specific legal authority for this action is set forth in the preamble 
discussion of our changed interpretation.

VI. Environmental Impact

    We have determined under 21 CFR 25.30(h) and 25.31(a) that this 
action is of a type that does not individually or cumulatively have a 
significant effect on the human environment. Therefore, neither an 
environmental assessment nor an environmental impact statement is 
required.

VII. Executive Order 13132: Federalism

    We have analyzed this final rule in accordance with the principles 
set forth in Executive Order 13132. We have determined that this final 
rule does not contain policies that have substantial direct effects on 
the States, on the relationship between the National Government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. Accordingly, we have concluded that the 
final rule does not contain policies that have federalism implications 
as defined in the order and, consequently, a federalism summary impact 
statement is not required.

VIII. Paperwork Reduction Act of 1995

    This final rule contains information collection requirements that 
are subject to public comment and review by the Office of Management 
and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501-3520). We describe these provisions below in this section of the 
document with an estimate of the annual reporting burden. Our estimate 
includes the time for reviewing instructions, searching existing data 
sources, gathering and maintaining the data needed, and completing and 
reviewing each collection of information.
    Title: Applications for FDA Approval to Market a New Drug: Patent 
Submission and Listing Requirements and Application of 30-month Stays 
on Approval of Abbreviated New Drug Applications Certifying That a 
Patent Claiming a Drug Is Invalid or Will Not Be Infringed
    Description: The final rule clarifies the types of patent 
information that must and must not be submitted to FDA as part of an 
NDA, an amendment or supplement. The final rule also requires persons 
submitting an NDA, amendment or supplement, or submitting information 
on a patent after NDA approval, to make a detailed patent declaration 
using required FDA declaration forms. The final rule permits the 
possibility of only one 30-month stay per each ANDA or 505(b)(2) 
application's approval date in the event of patent infringement 
litigation because the final rule does not require ANDA or 505(b)(2) 
applicants to provide a notice of certification of invalidity or 
noninfringement of a patent if the application already contains such a 
certification or if a full opportunity for a 30-month stay resulted 
after such notice.
    Description of Respondents: Persons submitting an NDA, amendment or 
supplement, or submitting information on a patent after NDA approval, 
and persons submitting an ANDA or 505(b)(2) application containing a 
patent certification of invalidity or noninfringement of a patent.
    We estimate the burden of this collection of information as 
follows:

                                 Table 1.--Estimated Annual Reporting Burden\1\
----------------------------------------------------------------------------------------------------------------
                                                    Frequency of    Total Annual     Hours per
       21 CFR Section         No. of Respondents      Responses       Responses      Response      Total Hours
----------------------------------------------------------------------------------------------------------------
314.50(a) through (f), (h),         107                  2.8           296          1,684               498,464
 and (k) (citing 21 CFR
 314.53) FDA Forms 3542 and
 3542a
314.50(i)(1)(i) and                  74                  1.5           111              4                   444
 314.94(a)(12)
314.52(a)(3) and                     74                  1.01           74             12                   897
 314.95(a)(3)
----------------------------------------------------------------------------------------------------------------
Total                                                                                                   499,805
----------------------------------------------------------------------------------------------------------------
\1\ There are no capital costs or operating and maintenance costs associated with this collection of
  information.

    Our estimates are based on the following assumptions. For the years 
1998 to 2002, the annual number of original applications we have 
received containing a paragraph IV certification has been 61, 58, 79, 
90, and 82, respectively. The annual average is 74 ((61 certifications 
+ 58 certifications +79 certifications + 90 certifications + 82 
certifications) / 5 years = 74 certifications / year). Because the 
final rule requires notice of a paragraph IV certification filed in the 
original ANDA or 505(b)(2) application or when the application is 
amended to include a paragraph IV certification or when such notice did 
not provide a full opportunity for a 30-month stay, this would mean 
that these applicants would provide one notice to NDA holders and 
patent owners, and, in rare instances, a second notice. We increase the 
frequency of response to account for these rare second notices. There 
may still be multiple certifications made by ANDA or 505(b)(2) 
applicants which will not require notice. In previous estimates, we 
have combined the information collection burden for both the notice and 
certification. For purposes of the final rule, we assume that the 
certification information collection burden is 4 hours and the 
information collection burden for the notice is 12 hours. We also 
account for the multiple number of certifications that may have to be 
provided by an ANDA or 505(b)(2) applicant. Under pre-existing 
regulations, we have had

[[Page 36699]]

NDA holders submit two or more patents for a single NDA. While this may 
continue to occur, we believe that this final rule may reduce the 
number of patents submitted for listing because we have clarified the 
type of patents that must be submitted. The number of patents submitted 
could increase because we allow polymorph patents to be submitted or it 
could decrease if no test data exist to demonstrate that a drug product 
containing the polymorph will perform the same as the drug product 
described in the NDA. We, thus, estimate the number of annual 
certifications at 1.5 x 74 (the number of original certifications). 
Thus, the information collection burden for Sec. Sec.  314.50(i)(1)(i) 
and 314.94(a)(12) (certifications) would be 444 hours (74 respondents x 
1.5 response per respondent x 4 hours per response = 444 hours). The 
information burden for Sec. Sec.  314.52(a)(3) and 314.95(a)(3) 
(notices) would be 897 hours (74 respondents x 1.01 response per 
respondent x 12 hours per response).
    To estimate the number of enhanced patent declarations that will be 
submitted annually, we referred to historical data on patent 
submissions. For the years 1998 to 2002, the numbers of patents 
submitted to us were 159, 205, 321, 280, and 268 respectively, for an 
annual average of 246.6 ((159 patents +205 patents +321 patents+280 
patents+268 patents) / 5 years = 247 patents / year). Because many of 
these individual patents are included in multiple NDA submissions, 
there could be multiple declarations for a single patent. From our 
review of submissions, we believe the number of duplicate patent 
listings to be 20 percent of the number of unique patents. Therefore, 
we estimate 49.2 (246.6 patents x 20 percent) patent declarations will 
be multiple listings, and there will be 296 (247 declarations + 49 
declarations = 296 declarations) total annual patent declarations. As 
we received 115 and 99 NDAs in 2000 and 2001, respectively, we assume 
there will be 107 ((115 applications + 99 applications) / 2 years = 80 
applications / year) instances where an NDA holder would be affected by 
the patent declaration requirements and that each of these holders 
would, on average, submit 2.8 (296 declarations / 107 instances = 2.8 
declarations per instance) on FDA Forms 3542 or 3542a.
    However, Sec.  314.53(b) and (c) have different impacts on the 
hours per response. On the one hand, Sec.  314.53(b) might decrease the 
reporting burden because it would specify certain patents that must not 
be submitted, and thus NDA applicants and holders and patent owners 
will not submit information on those patents. On the other hand, Sec.  
314.53(b) will require NDA applicants and holders or patent owners to 
submit patent information on different forms of the active ingredient 
described in the NDA, and this could result in more patent information 
being submitted or less patent information if test data do not exist to 
demonstrate that a drug product containing the polymorph will perform 
the same as the drug product described in the NDA. We cannot determine 
whether the potential net effect will increase, decrease, or not change 
the overall burden associated with submitting patent information, so we 
have not assigned any change in the total reporting burden for the 
change in patent information alone.
    In contrast, Sec.  314.53(c) makes the patent declaration more 
detailed. The change in the declaration will increase the burden hours 
per response under Sec.  314.50(h) (the provision under which we 
covered patent declarations described in Sec.  314.53(c)) because 
respondents will be required to be more precise in their declarations. 
Based on other rules that require respondents to compile and submit 
information in their possession, we estimate that the information 
required to be submitted on the patent declaration forms, FDA Forms 
3542 or 3542a, will result in an additional information collection 
burden of 18 hours. However, the previous burden hour estimate of 1,666 
hours for Sec.  314.50 covered paragraphs (a) through (f), in addition 
to paragraphs (h) and (k) (see 66 FR 29143 at 29146, May 29, 2001). We 
are unable to determine how many of the 1,666 hours were devoted to 
patent declarations, so, in this table, we simply add 18 hours to the 
1,666 hour estimate for Sec.  314.50(a) through (f), (h), and (k), 
resulting in a burden hour estimate of 1,684 hours (1,666 hours + 18 
hours) to account for a respondent's need for more time to make and 
verify the patent declaration. Thus, the information collection burden 
for Sec.  314.50(a) through (f), (h), and (k)(citing Sec.  314.53) will 
increase from the estimate we made in the proposed rule of 209,560 
hours to 498,464 hours (296 annual responses x 1,684 hours per response 
= 498,464 hours).
    The information collection provisions of this final rule have been 
submitted to OMB for review. Prior to the effective date of this final 
rule, FDA will publish a notice in the Federal Register announcing 
OMB's decision to approve, modify, or disapprove the information 
collection provisions in this final rule. An agency may not conduct or 
sponsor, and a person is not required to respond to, a collection of 
information unless it displays a currently valid OMB control number.

IX. Analysis of Economic Effects

    We have examined the impacts of the rule under Executive Order 
12866, and the Regulatory Flexibility Act (5 U.S.C. 601-612), and under 
the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501 et seq.). 
Executive Order 12866 directs agencies to assess all costs and benefits 
of available regulatory alternatives and, when regulation is necessary, 
to select regulatory approaches that maximize net benefits (including 
potential economic, environmental, public health and safety, and other 
advantages, distributive impacts, and equity). Unless the agency 
certifies that the rule is not expected to have a significant economic 
impact on a substantial number of small entities, the Regulatory 
Flexibility Act, as amended by the Small Business Regulatory 
Flexibility Act (SBREFA), requires agencies to analyze regulatory 
options that would minimize any significant economic impact of a rule 
on small entities. Section 202 of UMRA requires that agencies prepare a 
written statement of anticipated costs and benefits before proposing 
any rule that may result in expenditures by State, local, and tribal 
governments in the aggregate, or by the private sector, of $100 million 
in any one year (adjusted annually for inflation). We have conducted 
analyses of the rule, and have determined that the rule is consistent 
with the principles set forth in the Executive Order and in these 
statutes.
    The final rule is a significant regulatory action as defined by the 
Executive Order. With respect to the Regulatory Flexibility Act, we 
certify that this final rule is not expected to have a significant 
impact on a substantial number of small entities. This regulatory 
action is also a major rule under the Congressional Review Act. The 
discussion of costs and benefits is consistent with the requirements of 
the UMRA.

A. Summary

    The economic impacts arise from a variety of effects of this rule. 
The primary effect is the elimination of multiple 30-month stays, which 
(as explained earlier) will result in earlier market entry by generic 
drug manufacturers without appreciable effects on pharmaceutical 
innovation. Earlier generic competition will result in gains for two 
groups. It will reduce pharmaceutical prices to consumers and increase 
net revenues of generic drug manufacturers. Earlier competition also

[[Page 36700]]

will result in a revenue loss for innovator drug companies, which will 
be offset slightly by a reduction in associated costs. We believe that 
the rule will also reduce legal fees associated with disputed patents, 
although we are unable to provide quantitative estimates of this 
effect. In addition, innovator drug companies will face a burden of 
completing revised patent declaration forms. Finally, those NDA holders 
wishing to submit patents claiming different polymorphs of the active 
ingredient described in the NDA will need to have test data 
demonstrating ``sameness.'' Table 2 below provides a summary of our 
estimates of these effects and overall net benefits. The benefits and 
costs are annualized at a 7-percent discount rate over 10 years. We 
have chosen this time period because the Centers for Medicare and 
Medicaid Services (CMS), the source of the most reliable pharmaceutical 
expenditure estimates, projects these expenditures only for the next 10 
years. We expect that this rule will generate substantial net benefits 
beyond this time period.

                Table 2.--Economic Effects of the Rule\1\
------------------------------------------------------------------------
                                                      Amount per year
                     Effects                       (millions of dollars)
------------------------------------------------------------------------
Gains                                              .....................
 [sbull]Savings to consumers                       3,290
 [sbull] Net revenues to generic manufactures      1,810
 [sbull]Reduced legal costs                        Not quantified
------------------------------------------------------------------------
Losses                                             .....................
 [sbull] Revenue loss to innovator firms (net of   4,870
 associated costs)                                 <10
 [sbull] Costs of patent declarations and data to
 support polymorph patent submissions
------------------------------------------------------------------------
Net Benefits                                       220
------------------------------------------------------------------------
\1\ Gains and Losses include impacts of an economic transfer in addition
  to changes in resource costs.

    These estimates are derived using methods and data similar to those 
described at more length in the preamble to the proposed rule published 
in the Federal Register on October 24, 2002 (see 67 FR 65448 at 65459 
to 65464). In that analysis, we found that the increase in revenues to 
generic drug manufacturers would be $19.117 billion over 10 years, or 
$1.8 billion per year if annualized assuming a 7-percent discount rate. 
The benefit to consumers would be $34.822 billion over 10 years or an 
annualized $3.3 billion. We found that the reduction in revenues to 
innovator firms would be mitigated somewhat by the reduction in 
marketing expenses and that the cost would be $51.508 billion over ten 
years, or an annualized $4.9 billion. The 10-year net benefit is $2.356 
billion, and the annualized net benefit is approximately $220 million.
    With respect to the changes in market shares, the gains to 
consumers and generics equal the losses to innovators. An uncertainty 
estimate on the cost side would equal the uncertainty on the benefit 
side of such a transfer and would not affect our projection of net 
benefits. Our projection of net benefits is driven by our estimate of 
support costs. The primary economic impact of this action is a transfer 
from innovator drug firms to consumers and generic drug firms. But as 
innovator drug firms face a decline in revenues, they will save 
substantial resources used to support their products. These support 
costs, which include marketing, advertising, and administration, 
outweigh the costs associated with polymorph testing and completing the 
revised declaration, so the rule is a net benefit. These support costs 
are based on a point estimate provided by literature that does not 
customarily provide confidence intervals. We cannot, therefore, provide 
confidence intervals about our net benefit estimate, but believe the 
uncertainty to be small, relative to the projected net benefit.
    We received no comment on the analysis published with the proposal. 
We continue to believe these estimates to be reasonable and include 
them in the final rule. This final rule, however, contains provisions 
that differ from what was in the proposed rule. To account for these 
provisions, we have changed our analysis of the burden of providing the 
information required for completing the patent declaration and we 
assess the impact of the requirement that NDA applicants or holders or 
patent owners submitting patents claiming different polymorphs of the 
active ingredient described in the NDA. In all other major respects, 
however, our analysis is unchanged from the proposal, so we do not 
repeat here some parts of our analysis that were described in detail in 
the proposal (see 67 FR 65448 at 65459 to 65464).

B. Benefits of the Regulation

    We have identified two principal effects from the elimination of 
30-month stays. These effects are impacts associated with parties 
gaining in economic transfer. Generic drug manufacturers gain the 
market share lost by innovators. Generic revenues, therefore, would be 
expected to increase. Also, to the extent that these generic drugs are 
less expensive than innovator drugs, consumers will benefit from saving 
money as a result of earlier access. Our model, as described in the 
proposed rule (see 67 FR 65448 at 65460 to 65462), estimates costs and 
benefits to consumers and innovators and generic drug firms for the 
first year the rule would be in effect. The projected changes in market 
shares and prices in the model are based on studies published in the 
economic literature and by FDA. We then escalate the 1-year estimates 
by the CMS--projected annual percentage increases in prescription drug 
expenditures to obtain estimates for 10 years. This 10-year stream is 
then annualized at a 7-percent discount rate to obtain the annualized 
estimate.
1. Gains to Consumers
    Generic drugs are cheaper than their innovator counterparts. As a 
generic drug gains market share and its price falls, consumers save 
more money. The elimination of multiple 30-month stays per ANDA and 
505(b)(2) applications and earlier market entry by generic drugs will 
reduce consumer expenditures on pharmaceuticals. We estimate that the 
1-year savings to consumers are projected to be $2.040 billion. We use 
the CMS pharmaceutical expenditure projections to escalate the base 
year figure results in a 10-year consumer savings estimate of $34.822 
billion for the final rule. Our annualized benefit using a 7-percent 
discount rate is $3.288 billion, the same as the proposed rule.

[[Page 36701]]

2. Gains to the Generic Drug Industry
    Innovator market share erosion is accompanied by a gain in generic 
market share. We estimate the 1-year increase in revenues to be $1.120 
billion. Escalating this impact by the annual increases in 
pharmaceutical expenditures yields a 10-year revenue gain of $19.117 
billion. Our annualized impact using a 7-percent discount rate is 
$1.805 billion. These estimates are the same as in the proposed rule.
3. Benefits Not Quantified
    Many important benefits associated with this final rule are 
difficult to quantify. The benefits to consumers from lower prices also 
involve favorable secondary benefits from improved access to less 
expensive drugs. While the economic literature indicates generic 
competition does not lead to significant overall increases in the 
quantity of drugs demanded, we nevertheless recognize this rule has 
favorable distributional effects for consumers who otherwise may not 
have been able to afford some medications. Such a benefit is consistent 
with the objective of improving access to affordable quality 
healthcare. Consumers with better access to affordable safe and 
effective therapies are healthier and enjoy a higher quality of life.
    By addressing multiple 30-month stays, this final rule is removing 
a barrier to entry for generic drug firms. In principle, the removal of 
a barrier to entry would imply an increase in economic efficiency. The 
existing economic literature, however, indicates no significant 
increase in the quantity of drugs demanded with generic entry, implying 
no gain in efficiency from the removal of the barrier to entry. Thus, 
we do not quantify any efficiency gains in our analysis. Nevertheless, 
this rule encourages more and earlier market entry by generic drug 
firms and may impact consumption in a way not captured by the economic 
literature. To that extent, we believe this rule has the potential to 
increase economic efficiency.
    The costs of allocating legal resources to defend patent 
protections are substantial. We do not know the extent to which this 
final rule will reduce such costs, but by eliminating multiple 30-month 
stays per ANDA and 505(b)(2) application, we are reducing the number of 
instances where innovator and generic drug firms would engage in such 
litigation. Moreover, we believe that this rule will reduce litigation 
because it clarifies which patents must and must not be submitted and 
reduces incentives for submitting patents that may ultimately be found 
invalid. It logically follows that the reduction in resources devoted 
to litigation would result in savings to both innovator and generic 
drug firms.
    This final rule reduces the level of uncertainty associated with 
drug marketing decisions. For example, the final rule diminishes 
incentives associated with submitting later-issued patents late in the 
patent life or exclusivity period of the product described in the NDA. 
Increasing the predictability of the generic drug entry process reduces 
product introduction costs faced by generic drug firms. In the final 
rule, we are also addressing a source of confusion over the submission 
of polymorph patents for listing in the Orange Book. We believe that a 
more predictable business environment benefits both innovator and 
generic drug firms.
    Another important benefit of the final rule involves the balance 
between rewarding innovation and the availability of less expensive 
drugs. In striking this balance, we do not believe that the Hatch-
Waxman Amendments intended to create the potential for NDA holders to 
obtain multiple 30-month stays to unduly delay generic competitors. We 
believe this balance to be important, yet find the value difficult to 
quantify. Nevertheless, in addressing the issue of multiple 30-month 
stays, we believe this action has the very valuable benefit of 
preserving the balance struck in the Hatch-Waxman Amendments.
4. Total Benefits of the Regulation
    The total quantified benefits of this final rule include the gains 
in generic drug manufacturer revenues and consumer savings from earlier 
access to less expensive pharmaceuticals. These quantified gains to 
consumers and generic drug companies are the result of an economic 
transfer. The 1-year benefits to generic drug manufacturers and 
consumers are $1.119 billion and $2.040 billion, respectively. 
Escalating these base year costs over 10 years yields generic drug 
manufacturer revenue gains of $19.117 billion and consumer savings of 
$34.822 billion, for a total of $53.940 billion. The 10-year annualized 
benefits, using a 7-percent discount rate, are $1.805 billion for 
generic drug manufacturers and $3.288 billion for consumers, for a 
total of $5.093 billion.

C. Costs of the Regulation

    In the proposed rule, we identified two sources of costs. 
Innovators lose revenues from earlier generic competition and 
innovators must complete patent declarations. The loss in revenues to 
innovator drug companies is part of an economic transfer, but is 
included in this analysis with the resource costs associated with this 
action. We summarize the revenue loss and we assess the costs 
associated with the declaration requirement. In addition, we estimate 
the burden to industry from the requirement that, for submission of 
patents claiming different polymorphs of the active ingredient 
described in the NDA, there must be test data demonstrating that a drug 
product containing the polymorph will perform the same as the drug 
product described in the NDA.
    In the proposed rule, we addressed potential concerns about the 
effect this action may have on innovation. After considering potential 
impacts, we concluded that any negative effect would be minimal. As 
discussed in the proposed rule, while the initial 30-month stay is part 
of the balance struck in the Hatch-Waxman Amendments to reward 
innovation, the subsequent stays are not part of this balance. 
According to the FTC report, most of the court rulings examined by the 
FTC, which involved a subsequent 30-month stay, found the underlying 
patent to be either invalid or not infringed. Extending market 
exclusivity through multiple stays is a strategy that has become 
popular in the last few years and is not a longstanding source of 
research funding. Subsequent stays could actually hinder innovation 
through the replacement effect, in that they provide a disincentive for 
an NDA holder to improve upon its own product. Moreover, to the extent 
that subsequent 30-month stays might be associated with increases in 
spending on research, these increases do not necessarily improve social 
welfare (see 67 FR 65460). We received no comment on our assessment of 
the impact on innovation and continue to believe it to be reasonable.
1. Innovator Revenue Loss
    As discussed in the analysis of impacts in the proposed rule, the 
elimination of multiple 30-month stays per ANDA or 505(b)(2) 
application allows generic drugs to enter the market earlier. Upon 
entry, generic versions of an innovator drug gradually lower their 
prices and take market share from the innovator. With the loss of 
market share, innovator revenues are lower than they would be had the 
innovator been allowed to use multiple 30-month stays to delay generic 
entry. In the analysis in the proposed rule, we used data from 
instances where generics had been blocked with multiple 30-month stays 
and calculated the impact of a typical

[[Page 36702]]

drug being blocked for a typical period of time. We estimated the 1-
year loss in innovator revenues to be $3.160 billion. As discussed in 
the proposed rule, we believe that the negative impact on innovators 
from earlier generic competition will be mitigated somewhat by a 
reduction in required innovators' costs. With earlier generic 
competition, innovators will reduce marketing expenses. In the proposed 
rule, we estimated the 1-year reduction in support costs to be 
approximately $142 million. For the final rule, we estimate that the 1-
year loss in revenues, after adjusting for the reduction in support 
costs, is $3.017 billion, the same as in the proposed rule.
2. Declaration Costs
    In the proposed rule, we used earlier information collection data 
to estimate there will be 124 annual patent declarations by innovator 
firms. We now believe that the number of patents submitted to us each 
year would better estimate the annual number of patent declarations. 
For the years 1998 to 2002, the numbers of patents submitted to us were 
159, 205, 321, 280, and 268 respectively, for an annual average of 246. 
We understand that many of these individual patents are included in 
multiple NDA submissions, so there could be multiple declarations for a 
single patent and this method could underestimate the number of 
declarations. From our review of submissions, we believe the number of 
duplicate patent listings to be 20 percent of the number of unique 
patents. Therefore, we estimate 49.2 (246.6 x 20 percent) patent 
declarations will be multiple listings, and there will be 295.8 (246.6 
+ 49.2) annual patent declarations. We have created patent declaration 
forms to make the submission of patent information less burdensome. The 
two forms, for filing with an NDA submission and upon or after NDA 
approval, will contain more information, but we have simplified the 
format to make these easier to complete. In simplifying the forms, we 
believe our initial estimate of 24 additional hours per declaration to 
complete these forms likely overstates the actual burden. To account 
for the simplification of the declaration process, we have lowered the 
expected time required to complete a patent declaration to 18 hours.
    A regulatory affairs specialist could perform the tasks associated 
with this process. Based on the total average hourly compensation of 
$55.14\2\ the estimated cost would be $992 ($55.14 per hour x 18 hours) 
per event. The burden on individual firms would depend on the number of 
declarations they submit. We estimate that the 1-year burden for 
submitting patent declaration forms is $293,000 ($992 per event x 295.8 
events).
---------------------------------------------------------------------------

    \2\ The figure of $55.14 represents the hourly rate for 
``lawyer'' from the Bureau of Labor Statistics 2003 National 
Compensation Survey of $38.77, and then adjusted for inflation at 
1.58 percent (unadjusted CPI-U) and increased 40 percent to account 
for benefits.
---------------------------------------------------------------------------

3. Cost of Submitting Polymorph Patents
    We are requiring the submission of patent information for patents 
that claim different polymorphs of the active ingredient described in 
the NDA. NDA holders will now be able to submit these polymorph patents 
for listing in the Orange Book, as long as they have test data 
demonstrating that a drug product containing the polymorph will perform 
the same as the drug product described in the NDA.
    We cannot make a precise estimate of the impact of these 
requirements, as costs can vary substantially depending on the 
substance being tested, the number of subjects required, the cost of 
raw materials, and other factors. As part of an unrelated study in 
1998, we commissioned a contractor, Eastern Research Group (ERG) to 
estimate the cost of bioequivalence testing. We believe the burden of 
demonstrating that a drug product containing the polymorph will perform 
the same as the drug product described in the NDA to be similar to that 
of demonstrating bioequivalence. Our estimates include both the cost of 
manufacturing the batch and the cost of conducting the bioequivalence 
testing. ERG found the cost of performing such testing to be between 
$70,000 and $750,000.\3\ We believe the cost of showing ``sameness'' to 
be at the higher end of this range, and estimate the burden to be 
between $500,000 and $750,000. The midpoint of this estimate is 
$625,000. (We did not adjust the ERG estimates for inflation.)
---------------------------------------------------------------------------

    \3\ Pharmaceutical Industry Cost Savings Through Use of the 
Scale-up and Post-Approval Change Guidance for Immediate Release 
Solid Oral Dosage Forms ( SUPAC-IR), prepared for FDA, 1998, p. 63.
---------------------------------------------------------------------------

    We believe a firm's decision to submit a polymorph patent for 
listing will depend on whether the expected benefits to the firm from 
listing exceed the costs of showing ``sameness.'' We recognize that 
potential benefits from listing polymorph patents may be reduced by the 
elimination in the final rule of multiple 30-month stays in approval of 
ANDA or 505(b)(2) applications. Thus, the cost of demonstrating 
``sameness'' would deter submitting patents for listing with expected 
values less than approximately $625,000. We believe the typical value 
of a deterred polymorph patent to be substantially less than the cost 
of submission of the patent for listing, as many of the patents have 
little value without the ability to delay generic entry through 
multiple 30-month stays. For this analysis, we assume such low value 
patents to be worth approximately 20 percent of the cost of showing 
``sameness,'' or $125,000.
    We believe the annual number of polymorph patents that will be 
submitted for listing to be small, but we do not know with certainty. 
We reviewed a publicly available listing of NDAs in which an outside 
party had identified patents it judged to be polymorph patents. Of the 
105 NDAs in the sample, there were 13 polymorph patents. Applying that 
same ratio to the 107 expected NDAs per year, we estimate 13.2 (107 x 
13 / 105) potential polymorph patents to be submitted for listing per 
year. We assume that a polymorph patent will have a high potential 
value (greater than $625,000--the midpoint of the testing cost 
estimates) and be submitted, or will have a low potential value 
($125,000) and not be submitted. With the elimination of multiple 30-
month stays per ANDA or 505(b)(2) application, we believe the number of 
high-value polymorph patents to be a subset of the number of total 
polymorph patents, and assume three-fourths of the potential patents 
will not be submitted for listing. Thus, we assume 3.3 (13.2 potential 
patents x 0.25 likelihood of being high value) patents will be 
submitted for listing at a 1-year cost of $2.06 million (3.3 patents x 
$625,000 cost per patent). Likewise, we assume 9.9 (13.2 potential 
patents x 0.75 likelihood of being low value) patents will not be 
submitted each year. We estimate the 1-year cost from the inability to 
submit these patents for listing to be $1.24 million (9.9 patents x 
$125,000 value of low-value patent) and the 1-year burden associated 
with the test data demonstrating ``sameness'' for polymorph patents to 
be submitted for listing is estimated to be $3.3 million ($2.06 million 
+ $1.24 million).
4. Total Costs of the Regulation
    The total costs of the final rule include the lost revenues to 
innovator firms from the erosion of market share, mitigated by the 
decrease in support costs, the cost of completing a more detailed 
patent declaration, and the costs associated with the requirement that 
test data exist demonstrating ``sameness'' in order to submit a 
polymorph patent for listing. The estimated 1-year loss in revenues 
from

[[Page 36703]]

erosion of market share is $3.160 billion and the reduction in support 
costs would reduce this loss by $142 million. We estimate the 1-year 
cost of providing the patent declaration information by completing the 
patent declaration forms is $293,000 and the cost associated with 
polymorph patents is $3.3 million. Thus, we estimate the 1-year cost to 
innovator firms is $3.022 billion.
    We recognize that in projecting the future impact of this final 
rule, we must account for changes in the market for pharmaceuticals. 
The Office of the Actuary at CMS, projects that expenditures on 
prescription pharmaceuticals will increase dramatically in the near 
future. As in the proposed rule, we account for the projected growth in 
pharmaceutical expenditures by escalating our 1-year estimate by the 
annual CMS projected growth in prescription drug expenditures. We 
estimate the 10-year costs for the final rule are $51.584 billion. We 
annualized over the 10-year period at a 7 percent discount rate yields 
to obtain a cost of $4.871 billion.

D. Summary of Costs and Benefits

    We estimate the 10-year cost of this final rule to be $51.584 
billion and the annualized cost to be $4.871 billion. The 10-year 
benefit of this final rule is estimated to be $53.940 billion and the 
annualized benefit is $5.093 billion. These benefit and cost figures 
include the estimated impacts of an economic transfer. Thus, the 10-
year net benefit is $2.356 billion and the annualized net benefit is 
$222 million. The quantified benefits exceed the quantified costs.
    Moreover, there are benefits that are difficult to quantify. These 
benefits include reduced costs of litigation and more predictability in 
the business environment. The benefits to consumers also involve 
favorable secondary benefits, such as improved access to less expensive 
drugs. It also preserves the balance struck in the Hatch-Waxman 
Amendments.

E. Regulatory Alternatives

    In creating this final rule, we considered several regulatory 
alternatives, including not enacting this rule. We rejected the 
alternative of not enacting this final rule because under the current 
situation, NDA holders and patent owners are able to use multiple 30-
month stays to delay generic entry and frustrate the intent of the 
Hatch-Waxman Amendments. We considered allowing the submission of 
polymorph patents for listing in the Orange Book without the required 
test data demonstrating ``sameness.'' We rejected this alternative as 
we decided that a patent claiming different polymorphs of the active 
ingredient described in the NDA needed to have test data demonstrating 
that a drug product containing the polymorph will perform the same as 
the drug product described in the NDA. This requirement is similar to 
the requirement of establishing bioequivalence.
    We also considered using the current system of patent declarations. 
This alternative was also rejected because the pre-existing declaration 
information may be insufficient to prevent NDA applicants and holders 
and patent owners from submitting patents to us that should not be 
submitted and listed under the act. The choices to require tests 
demonstrating ``sameness'' for polymorph patents and the required 
patent information provided in the patent declarations are particularly 
important in light of the fact that we lack the authority, expertise 
and resources to evaluate patents submitted to determine whether they 
should be listed in the Orange Book.

F. Small Business Impact

    Unless the agency certifies that the rule is not expected to have a 
significant impact on a substantial number of small entities, the 
Regulatory Flexibility Act, as amended by SBREFA, requires agencies to 
analyze regulatory options that would minimize any significant economic 
impact of a rule on small entities. In the proposed rule, we certified 
that we believed the rule is not expected to have a significant impact 
on a substantial number of small entities, as we did not know of any 
small innovator companies that use or would use multiple 30-month stays 
to block entry from generic competitors. We did not receive comment on 
this certification and we continue to believe that this final rule will 
not have a significant impact on a substantial number of small 
entities.

List of Subjects in 21 CFR Part 314

    Administrative practice and procedure, Confidential business 
information, Drugs, Reporting and recordkeeping requirements.

0
Therefore, under the Federal Food, Drug, and Cosmetic Act and under 
authority delegated to the Commissioner of Food and Drugs, 21 CFR part 
314 is amended as follows:

PART 314--APPLICATIONS FOR FDA APPROVAL TO MARKET A NEW DRUG

0
1. The authority citation for 21 CFR part 314 continues to read as 
follows:

    Authority: 21 U.S.C. 321, 331, 351, 352, 353, 355, 355a, 356, 
356a, 356b, 356c, 371, 374, 379e.

0
2. Section 314.52 is amended by redesignating paragraph (a)(3) as 
paragraph (a)(4) and by adding new paragraph (a)(3) to read as follows:


Sec.  314.52  Notice of certification of invalidity or noninfringement 
of a patent.

    (a) * * *
    (3) This paragraph does not apply if the applicant amends its 
application to add a certification under Sec.  314.50(i)(1)(i)(A)(4) 
when the application already contained a certification under Sec.  
314.50(i)(1)(i)(A)(4) to a patent unless:
    (i) The notice of the previous certification under Sec.  
314.50(i)(1)(i)(A)(4) was withdrawn or changed to a certification other 
than a certification under Sec.  314.50(i)(1)(i)(A)(4); and
    (ii) The 45-day period under section 505(c)(3) of the act had not 
expired; and
    (iii) No person receiving notice under paragraphs (a)(1) and (a)(2) 
of this section had brought an action against the applicant for 
infringement of the patent that was the subject of the withdrawn or 
changed certification under Sec.  314.50(i)(1)(i)(A)(4).
* * * * *

0
3. Section 314.53 is amended by revising paragraph (b) and paragraphs 
(c)(1) through (c)(3) to read as follows:


Sec.  314.53  Submission of patent information.

* * * * *
    (b) Patents for which information must be submitted and patents for 
which information must not be submitted--(1) General requirements. An 
applicant described in paragraph (a) of this section shall submit the 
required information on the declaration form set forth in paragraph (c) 
of this section for each patent that claims the drug or a method of 
using the drug that is the subject of the new drug application or 
amendment or supplement to it and with respect to which a claim of 
patent infringement could reasonably be asserted if a person not 
licensed by the owner of the patent engaged in the manufacture, use, or 
sale of the drug product. For purposes of this part, such patents 
consist of drug substance (active ingredient) patents, drug product 
(formulation and composition) patents, and method-of-use patents. For 
patents that claim the drug substance, the applicant shall submit 
information only on those patents that claim the drug substance that is 
the subject of the pending or approved application or that claim a drug 
substance that is the same as the active ingredient that is the subject 
of the approved or pending

[[Page 36704]]

application. For patents that claim a polymorph that is the same as the 
active ingredient described in the approved or pending application, the 
applicant shall certify in the declaration forms that the applicant has 
test data, as set forth in paragraph (b)(2) of this section, 
demonstrating that a drug product containing the polymorph will perform 
the same as the drug product described in the new drug application. For 
patents that claim a drug product, the applicant shall submit 
information only on those patents that claim a drug product, as is 
defined in Sec.  314.3, that is described in the pending or approved 
application. For patents that claim a method of use, the applicant 
shall submit information only on those patents that claim indications 
or other conditions of use that are described in the pending or 
approved application. The applicant shall separately identify each 
pending or approved method of use and related patent claim. For 
approved applications, the applicant submitting the method-of-use 
patent shall identify with specificity the section of the approved 
labeling that corresponds to the method of use claimed by the patent 
submitted. Process patents, patents claiming packaging, patents 
claiming metabolites, and patents claiming intermediates are not 
covered by this section, and information on these patents must not be 
submitted to FDA.
    (2) Test Data for Submission of Patent Information for Patents That 
Claim a Polymorph. The test data, referenced in paragraph (b)(1) of 
this section, must include the following:
    (i) A full description of the polymorphic form of the drug 
substance, including its physical and chemical characteristics and 
stability; the method of synthesis (or isolation) and purification of 
the drug substance; the process controls used during manufacture and 
packaging; and such specifications and analytical methods as are 
necessary to assure the identity, strength, quality, and purity of the 
polymorphic form of the drug substance;
    (ii) The executed batch record for a drug product containing the 
polymorphic form of the drug substance and documentation that the batch 
was manufactured under current good manufacturing practice 
requirements;
    (iii) Demonstration of bioequivalence between the executed batch of 
the drug product that contains the polymorphic form of the drug 
substance and the drug product as described in the NDA;
    (iv) A list of all components used in the manufacture of the drug 
product containing the polymorphic form and a statement of the 
composition of the drug product; a statement of the specifications and 
analytical methods for each component; a description of the 
manufacturing and packaging procedures and in-process controls for the 
drug product; such specifications and analytical methods as are 
necessary to assure the identity, strength, quality, purity, and 
bioavailability of the drug product, including release and stability 
data complying with the approved product specifications to demonstrate 
pharmaceutical equivalence and comparable product stability; and
    (v) Comparative in vitro dissolution testing on 12 dosage units 
each of the executed test batch and the new drug application product.
    (c) Reporting requirements--(1) General requirements. An applicant 
described in paragraph (a) of this section shall submit the required 
patent information described in paragraph (c)(2) of this section for 
each patent that meets the requirements described in paragraph (b) of 
this section. We will not accept the patent information unless it is 
complete and submitted on the appropriate forms, FDA Forms 3542 or 
3542a. These forms may be obtained on the Internet at http://www.fda.gov by searching for ``forms''.
    (2) Drug substance (active ingredient), drug product (formulation 
or composition), and method-of-use patents--(i) Original Declaration. 
For each patent that claims a drug substance (active ingredient), drug 
product (formulation and composition), or method of use, the applicant 
shall submit FDA Form 3542a. The following information and verification 
is required:
    (A) New drug application number;
    (B) Name of new drug application sponsor;
    (C) Trade name (or proposed trade name) of new drug;
    (D) Active ingredient(s) of new drug;
    (E) Strength(s) of new drug;
    (F) Dosage form of new drug;
    (G) United States patent number, issue date, and expiration date of 
patent submitted;
    (H) The patent owner's name, full address, phone number and, if 
available, fax number and e-mail address;
    (I) The name, full address, phone number and, if available, fax 
number and e-mail address of an agent or representative who resides or 
maintains a place of business within the United States authorized to 
receive notice of patent certification under sections 505(b)(3) and 
505(j)(2)(B) of the act and Sec. Sec.  314.52 and 314.95 (if patent 
owner or new drug application applicant or holder does not reside or 
have a place of business within the United States);
    (J) Information on whether the patent has been submitted previously 
for the new drug application;
    (K) Information on whether the expiration date is a new expiration 
date if the patent had been submitted previously for listing;
    (L) Information on whether the patent is a product-by-process 
patent in which the product claimed is novel;
    (M) Information on the drug substance (active ingredient) patent 
including the following:
    (1) Whether the patent claims the drug substance that is the active 
ingredient in the drug product described in the new drug application or 
supplement;
    (2) Whether the patent claims a polymorph that is the same active 
ingredient that is described in the pending application or supplement;
    (3) Whether the applicant has test data, described in paragraph 
(b)(2) of this section, demonstrating that a drug product containing 
the polymorph will perform the same as the drug product described in 
the new drug application or supplement, and a description of the 
polymorphic form(s) claimed by the patent for which such test data 
exist;
    (4) Whether the patent claims only a metabolite of the active 
ingredient; and
    (5) Whether the patent claims only an intermediate;
    (N) Information on the drug product (composition/formulation) 
patent including the following:
    (1) Whether the patent claims the drug product for which approval 
is being sought, as defined in Sec.  314.3; and
    (2) Whether the patent claims only an intermediate;
    (O) Information on each method-of-use patent including the 
following:
    (1) Whether the patent claims one or more methods of using the drug 
product for which use approval is being sought and a description of 
each pending method of use or related indication and related patent 
claim of the patent being submitted; and
    (2) Identification of the specific section of the proposed labeling 
for the drug product that corresponds to the method of use claimed by 
the patent submitted;
    (P) Whether there are no relevant patents that claim the drug 
substance (active ingredient), drug product (formulation or 
composition) or method(s) of use, for which the applicant is seeking 
approval and with respect to which a claim of patent infringement could 
reasonably be asserted if a person not licensed by the owner of the 
patent engaged in the manufacture, use, or sale of the drug product;

[[Page 36705]]

    (Q) A signed verification which states:
    ``The undersigned declares that this is an accurate and complete 
submission of patent information for the NDA, amendment or 
supplement pending under section 505 of the Federal Food, Drug, and 
Cosmetic Act. This time-sensitive patent information is submitted 
pursuant to 21 CFR 314.53. I attest that I am familiar with 21 CFR 
314.53 and this submission complies with the requirements of the 
regulation. I verify under penalty of perjury that the foregoing is 
true and correct.''; and
    (R) Information on whether the applicant, patent owner or attorney, 
agent, representative or other authorized official signed the form; the 
name of the person; and the full address, phone number and, if 
available, the fax number and e-mail address.
    (ii) Submission of patent information upon and after approval. 
Within 30 days after the date of approval of its application or 
supplement, the applicant shall submit FDA Form 3542 for each patent 
that claims the drug substance (active ingredient), drug product 
(formulation and composition), or approved method of use. FDA will rely 
only on the information submitted on this form and will not list or 
publish patent information if the patent declaration is incomplete or 
indicates the patent is not eligible for listing. Patent information 
must also be submitted for patents issued after the date of approval of 
the new drug application as required in paragraph (c)(2)(ii) of this 
section. As described in paragraph (d)(4) of this section, patent 
information must be submitted to FDA within 30 days of the date of 
issuance of the patent. If the applicant submits the required patent 
information within the 30 days, but we notify an applicant that a 
declaration form is incomplete or shows that the patent is not eligible 
for listing, the applicant must submit an acceptable declaration form 
within 15 days of FDA notification to be considered timely filed. The 
following information and verification statement is required:
    (A) New drug application number;
    (B) Name of new drug application sponsor;
    (C) Trade name of new drug;
    (D) Active ingredient(s) of new drug;
    (E) Strength(s) of new drug;
    (F) Dosage form of new drug;
    (G) Approval date of new drug application or supplement;
    (H) United States patent number, issue date, and expiration date of 
patent submitted;
    (I) The patent owner's name, full address, phone number and, if 
available, fax number and e-mail address;
    (J) The name, full address, phone number and, if available, fax 
number and e-mail address of an agent or representative who resides or 
maintains a place of business within the United States authorized to 
receive notice of patent certification under sections 505(b)(3) and 
505(j)(2)(B) of the act and Sec. Sec.  314.52 and 314.95 (if patent 
owner or new drug application applicant or holder does not reside or 
have a place of business within the United States);
    (K) Information on whether the patent has been submitted previously 
for the new drug application;
    (L) Information on whether the expiration date is a new expiration 
date if the patent had been submitted previously for listing;
    (M) Information on whether the patent is a product-by-process 
patent in which the product claimed is novel;
    (N) Information on the drug substance (active ingredient) patent 
including the following:
    (1) Whether the patent claims the drug substance that is the active 
ingredient in the drug product described in the approved application;
    (2) Whether the patent claims a polymorph that is the same as the 
active ingredient that is described in the approved application;
    (3) Whether the applicant has test data, described at paragraph 
(b)(2) of this section, demonstrating that a drug product containing 
the polymorph will perform the same as the drug product described in 
the approved application and a description of the polymorphic form(s) 
claimed by the patent for which such test data exist;
    (4) Whether the patent claims only a metabolite of the active 
ingredient; and
    (5) Whether the patent claims only an intermediate;
    (O) Information on the drug product (composition/formulation) 
patent including the following:
    (1) Whether the patent claims the approved drug product as defined 
in Sec.  314.3; and
    (2) Whether the patent claims only an intermediate;
    (P) Information on each method-of-use patent including the 
following:
    (1) Whether the patent claims one or more approved methods of using 
the approved drug product and a description of each approved method of 
use or indication and related patent claim of the patent being 
submitted;
    (2) Identification of the specific section of the approved labeling 
for the drug product that corresponds to the method of use claimed by 
the patent submitted; and
    (3) The description of the patented method of use as required for 
publication;
    (Q) Whether there are no relevant patents that claim the approved 
drug substance (active ingredient), the approved drug product 
(formulation or composition) or approved method(s) of use and with 
respect to which a claim of patent infringement could reasonably be 
asserted if a person not licensed by the owner of the patent engaged in 
the manufacture, use, or sale of the drug product;
    (R) A signed verification which states: ``The undersigned declares 
that this is an accurate and complete submission of patent information 
for the NDA, amendment or supplement approved under section 505 of the 
Federal Food, Drug, and Cosmetic Act. This time-sensitive patent 
information is submitted pursuant to 21 CFR 314.53. I attest that I am 
familiar with 21 CFR 314.53 and this submission complies with the 
requirements of the regulation. I verify under penalty of perjury that 
the foregoing is true and correct.''; and
    (S) Information on whether the applicant, patent owner or attorney, 
agent, representative or other authorized official signed the form; the 
name of the person; and the full address, phone number and, if 
available, the fax number and e-mail address.
    (3) No relevant patents. If the applicant believes that there are 
no relevant patents that claim the drug substance (active ingredient), 
drug product (formulation or composition), or the method(s) of use for 
which the applicant has received approval, and with respect to which a 
claim of patent infringement could reasonably be asserted if a person 
not licensed by the owner of the patent engaged in the manufacture, 
use, or sale of the drug product, the applicant will verify this 
information in the appropriate forms, FDA Forms 3542 or 3542a.
* * * * *

0
4. Section 314.95 is amended by redesignating paragraph (a)(3) as 
paragraph (a)(4) and by adding new paragraph (a)(3) to read as follows:


Sec.  314.95  Notice of certification of invalidity or noninfringement 
of a patent.

    (a) * * *
    (3) This paragraph does not apply if the applicant amends its 
application to add a certification under Sec.  314.94(a)(12)(i)(A)(4) 
when the application already contained a certification under Sec.  
314.94(a)(12)(i)(A)(4) to a patent unless:
    (i) The notice of the previous certification under Sec.  
314.94(a)(12)(i)(A)(4) was withdrawn or changed to a certification 
other than a certification under Sec.  314.94(a)(12)(i)(A)(4);

[[Page 36706]]

    (ii) The 45-day period under section 505(j)(5)(B)(iii) of the act 
had not expired; and
    (iii) No person receiving notice under paragraphs (a)(1) and (a)(2) 
of this section had brought an action against the applicant for 
infringement of the patent that was the subject of the withdrawn or 
changed certification under Sec.  314.94(a)(12)(i)(A)(4).
* * * * *

    Dated: May 23, 2003.
Mark B. McClellan,
Commissioner of Food and Drugs.

    Dated: June 9, 2003.
Tommy G. Thompson,
Secretary of Health and Human Services.
[This appendix will not appear in the Code of Federal Regulations.]
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[FR Doc. 03-15065 Filed 6-12-03; 1:00 pm]
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